21 July 2015 : Column 1349

House of Commons

Tuesday 21 July 2015

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Business Before questions

Queen’s Speech (Answer to Address)

The Vice-Chamberlain of the Household reported to the House, That Her Majesty, having been attended with its Address of 27 May, was pleased to receive the same very graciously and give the following Answer:

I have received with great satisfaction the dutiful and loyal expression of your thanks for the speech with which I opened the present Session of Parliament.

Royal Assent

Mr Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

Supply and Appropriation (Main Estimates) Act 2015

European Union (Finance) Act 2015.

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Long-term Economic Plan

1. Sir Simon Burns (Chelmsford) (Con): What progress he has made on his long-term economic plan. [901111]

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): The long-term economic plan is working, but when it comes to building a Britain that lives within its means, we now need to finish the job. Today I am launching the spending review, which will support our priorities such as the national health service and national security. Savings will have to be made in other areas, but we have shown that, with careful management of public money, we can get more for less, and give working people real control over the decisions that affect them and their communities. The spending review will deliver better government and economic security, and the results will be announced to the House on 25 November.

Sir Simon Burns: The summer Budget took clear steps towards the delivery of a higher-wage, lower-tax, lower-benefits society, with the new national living wage

21 July 2015 : Column 1350

as the centrepiece. Does that not clearly demonstrate that the Conservatives are the natural party for hard-working people and their families?

Mr Osborne: My right hon. right Friend is absolutely right. We are building the higher-wage, lower-tax, lower-welfare economy that our country needs if it is to compete in the future and give real opportunities to working people. The new contract that we offer is this: businesses will pay higher wages and pay lower taxes and people will receive bigger pay cheques, but there will be lower welfare. That, I think, is a contract that the British people support.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): The Chancellor’s plan will not look very well planned or very long if it does not include some reference to productivity, higher-quality management, and, indeed, manufacturing. What is he going to do about those key issues?

Mr Osborne: We entirely acknowledge that we need to improve the productivity of the British economy. That is why, after the Budget, we published the productivity plan, which will introduce, for example, an apprenticeship levy to ensure that young people are given the skills and training that they need, and roads funds that will help to ensure that we have the right infrastructure for our country’s future.

As the hon. Gentleman acknowledged this morning in an interesting tweet, I think it was, the Labour party is going back to the 1980s. Those were his words. Unfortunately, the sensible voices of the old intake—

Mr Speaker: Sit down!

Mr Osborne: —are being drowned by those of the new intake.

Mr Speaker: Chancellor, sit down, man! I told you to sit down, so sit down! Mr Andrew Tyrie.

Mr Andrew Tyrie (Chichester) (Con): I am sorry about that, Mr Speaker. I thought that the Chancellor was just getting into gear.

Growth will, of course, depend partly on what the Bank of England does. Over the past five years, the Chancellor and Parliament have granted the Bank huge new powers over not only monetary but, in particular, financial policy, which directly affect millions of people. Does that not make the reforms of the way in which the Bank runs itself that the Chancellor will propose, along with greater accountability for its new board—for which the Treasury Committee, among others, has been pressing for a long time—all the more essential?

Mr Osborne: I pay tribute to the work that was done during the last Parliament by the Treasury Committee, some of whose members are still in their posts, and I again congratulate my right hon. Friend on remaining Chair of that Committee. Today we are publishing the consultation document on the new Bank of England Bill, which will come before Parliament in due course. The Bill follows the reforms announced by the Governor of the Bank, which built on the work done by the Treasury Committee and others. It will ensure that a

21 July 2015 : Column 1351

modern Bank of England is able to exercise the leadership that is required for the delivery of economic and financial stability. Moreover, for the first time—this is crucial, and I think that Parliament will appreciate it—the Bank will be open to the advice of the National Audit Office, and the value for money that that can deliver.

Stewart Hosie (Dundee East) (SNP): The success of the economic plan, long-term or otherwise, and the potential to improve productivity must be driven in part by sustained infrastructure capital investment, so can the Chancellor confirm that, instead of doing that, the plans he laid out in the summer Budget show total capital expenditure down every single year between 2015 and 2019-20 compared with the March Budget?

Mr Osborne: We made some in-year savings in this financial year in capital budgets that were not going to be well spent. We want to deliver value for money for Scottish taxpayers, as well as for taxpayers across the United Kingdom, but we will be spending more as a percentage of national income on capital investment in this decade than occurred under the last Labour Government.

Stewart Hosie: That is a fascinating answer, because of course the real answer is that in cash terms the spending is down—from 2015-16 onwards down £1.2 billion, £0.8 billion, £0.9 billion, £0.7 billion, and £1.3 billion by the time we get to 2019-20. So we know the forecasts are reduced, we know the Chancellor is cutting more than he needs in order to run a balanced budget, and we know he is undermining the potential for long-term growth, so why did he ignore all the advice, particularly from the OECD who told him two days before the Budget that “gross investment is low” and

“Transport infrastructure investment is poor”?

Does he really expect us to believe every—

Mr Speaker: Order. Questions are too long. We have got the general drift of the argument; let’s hear the answer.

Mr Osborne: We are investing a record amount in our transport system, and the new roads fund will help with transport investment in England, but there will be consequentials and money for Scotland as well. I make this general observation to the hon. Gentleman: if the Scottish Government think we are not spending enough in Scotland, they can raise taxes on the Scottish people and spend all the money in Scotland. They should have the courage to make that argument to the Scottish people.

Stephen Hammond (Wimbledon) (Con): My constituents would like to commend the Chancellor on the long-term economic plan, which is seeing great success in Wimbledon. Does he agree that the Budget measures, such as the apprenticeship levy and the drop in corporation tax, provide an incentive for employers to take on more apprentices and to reduce the productivity gap in the economy, and see further success in the long-term economic plan?

Mr Osborne: I thank my hon. Friend for the support he has given and welcome the fact that the people of Wimbledon understand that economic security is the

21 July 2015 : Column 1352

bedrock on which we can support the aspirations of working people. The apprenticeship levy addresses the key problem of the lack of skills in the British economy that has bedevilled us for decades. We are now going to introduce a system whereby companies that train their workforces get rewarded, and companies that do not have to make a contribution to the training that they free-ride off.

Chris Leslie (Nottingham East) (Lab/Co-op): Was it always part of the Chancellor’s long-term plan to scrap the maintenance grants for students from lower-income backgrounds? The Institute for Fiscal Studies said this morning that this change

“will raise debt for the poorest students, but do little to improve Government finances in the long run.”

Can the Chancellor tell us why this was not in his manifesto?

Mr Osborne: We put building a first-class university system right at the heart of our manifesto, and I think the person who made the best observation about this is the person the hon. Gentleman is backing for the leadership of the Labour party: the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). This is what she said in the House of Commons in 1998 when the last—[Hon. Members: “1988?”] There was a Labour Government then, who abolished grants and introduced loans, and this is what she said:

“I ask the House, having listened to the debate this evening, not to vote for”

maintenance grants which have

“not helped my constituents, but to take the radical approach, to go for the new, fair student loan system”.—[Official Report, 8 June 1998; Vol. 313, c. 831.]

There we have it: support from the right hon. Lady. The hon. Gentleman is old Labour.

Chris Leslie: Well, that fell a bit flat. I was asking about the Chancellor’s manifesto and what he promised. Taking away maintenance grants was always part of his plan, but he did not have the guts to tell students and their families before an election. However much he spins it, he is hitting students with more fees, more repayments and more debt—much more debt. Will he confirm that the poorest students will graduate not with the current £40,000 of debt, but now with an average of £53,000 of debt?

Mr Osborne: We are increasing the maintenance support that students have. We heard all that in the previous Parliament, when the Opposition said our reforms would put off people from low-income backgrounds going to university. In fact a record number of students from low-income backgrounds are now going to university. The Labour party that he is a member of once supported getting rid of grants and introducing loans, but this shows the distance it has come—that it now opposes this measure to support our university system. It has a new intake of old Labour MPs dragging them back to the 1980s, and we know the direction they are heading in: left, left, left—away from the centre ground of British politics and away from support for working people.

21 July 2015 : Column 1353

Mr Speaker: Some of these answers require a bit of practice, because they suffer from the disadvantage of being not just a bit long, but far too long—hopelessly long.

Equitable Life

2. Robert Neill (Bromley and Chislehurst) (Con): What steps he is taking to ensure as many policy holders as possible are identified before the Equitable Life payment scheme closes to new claimants on 31 December 2015. [901112]

The Economic Secretary to the Treasury (Harriett Baldwin): The Equitable Life payment scheme has already gone to great lengths to find policyholders, including checking against credit histories, a national advertising campaign and sending letters to last-known addresses. Thanks to that, almost 90% of policyholders have been paid. Where possible the scheme is now tracing all those remaining who are due £50 or more against DWP, national insurance numbers and address records.

Robert Neill: I accept that this Government and their predecessor have done much—more than anybody before did—to right an injustice that was done, but Equitable Life policyholders were victims of a regulatory failure, for which ultimately Government is responsible. As the economy grows, is it not time, out of decency and fairness towards that diminishing group of elderly people, to revisit the amount to be paid in compensation?

Harriett Baldwin: I am sure that my hon. Friend will welcome the fact that my right hon. Friend the Chancellor, in his excellent summer Budget, did in fact announce that all eligible non-annuitant policyholders in receipt of pension credit will see their lump sum payments doubled.

Government Support: Savers/Homeowners

3. James Berry (Kingston and Surbiton) (Con): What steps the Government are taking to support (a) people with savings and (b) home ownership. [901113]

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): We need to move Britain from an economy built on debt to a society built on savings and investment and home ownership. That is why we have reformed pensions and rewarded savers. To back home ownership we are building more starter homes, and our new Help to Buy ISA will be available from the beginning of December, because this Government support the aspirations of working people to buy their own home and provide for their future.

James Berry: In my weekly surgeries in Kingston and Surbiton a constant theme is how difficult it is to get on the housing ladder in London. Will my right hon. Friend explain how his Help to Buy policies will help my hard-working constituents? Does he agree that plans for more tax, more borrowing and more spending would put house building and families striving to save for a deposit at risk?

Mr Osborne: My hon. Friend is absolutely right. We are going to help his constituents to buy their own home. The Help to Buy scheme has helped 100,000 people; the new Help to Buy ISA will help the families he

21 July 2015 : Column 1354

represents save up for that deposit; and of course we all still want to see more starter homes being built. We have to address the acute housing shortage in London, and we have the policies to do it.

Barbara Keeley (Worsley and Eccles South) (Lab): Why are the Government abandoning people with savings and those who own their own homes? They are going to be forced to spend their savings and sell their homes to pay for their social care costs. The Chancellor raised the hopes of those older and vulnerable people before the election with a pledge that no one would have to sell their home to pay for care. Those people will feel badly let down by the Government’s U-turn. Did he ever intend to keep that manifesto pledge?

Mr Osborne: We are going to introduce that cap on care costs in this Parliament. It is a bit rich coming from a Labour party that was in power for 13 years and did absolutely nothing to cap those costs. That is why we are introducing the cap. We have also already introduced the changes that enable people to provide for their future care costs without having to sell their home. We are making those changes, alongside the support for savers and pensions, so that we move away from the society and economy built on debt that was left to this Government to an economy that builds and rewards savers.

Enterprise Zones

4. Tom Pursglove (Corby) (Con): What steps he is taking to support the creation of new enterprise zones. [901114]

The Chief Secretary to the Treasury (Greg Hands): In the summer Budget we announced the opening of the bidding round for a new wave of enterprise zones throughout England. This round will focus on ensuring that all places in England can benefit from the programme, including rural areas where appropriate, and the Government encourage towns and districts to work with local enterprise partnerships to develop bids. Details of the application process will be released in due course.

Tom Pursglove: I thank the Chief Secretary for his answer. I can advise that, in Corby, we are busily getting together to put in a bid. Corby is also taking in very considerable housing growth. Does he agree that areas that are taking in such growth should also receive the benefit of new jobs and new infrastructure?

Greg Hands: I thank my hon. Friend for his question. He is of course right. During the course of the previous Parliament, the performance of the programme improved, and it was absolutely right to create strong incentives for local areas to take part. That was consistent with our long-term economic plan. We are looking forward to examining his case for an enterprise zone in his Corby constituency in due course.

Mr Gregory Campbell (East Londonderry) (DUP): When the Government come to review the success of enterprise zones, especially those in the last wave, which includes one in my own constituency, will the Chief Secretary undertake to ensure that job creation becomes a major focus of enterprise zones as they are rolled out across the United Kingdom?

21 July 2015 : Column 1355

Greg Hands: The hon. Gentleman is absolutely right. Job creation is vital in the enterprise zone programme. Over the course of the previous Parliament, the programme supported more than 15,000 jobs, which brought in £2.1 billion of private investment.

19. [901130] Michael Fabricant (Lichfield) (Con): My right hon. Friend will know that there is already a successful local enterprise zone within the Greater Birmingham and Solihull LEP, of which Lichfield is a member. Will the Government now accept invitations from LEPs, which already have zones, for further zones?

Greg Hands: I thank my hon. Friend for that question. The Government have opened up the bidding round for new enterprise zones, and are encouraging LEPs to work with towns and rural areas to develop new sites. The bidding round is open to all LEPs across England, but only those sites with strong commercial propositions and value-for-money cases will be accepted.

Tax Credits

5. Teresa Pearce (Erith and Thamesmead) (Lab): What estimate he has made of the number of people who will receive a net reduction in income as a result of the policies on tax credits announced in the summer Budget 2015. [901115]

The Exchequer Secretary to the Treasury (Damian Hinds): The Government want to move from a low-wage, high-tax, high-welfare society to a higher-wage, lower-tax, less welfare-reliant society. That means more emphasis on support to hard-working families on low incomes by reducing income tax, increasing the personal allowance, increasing wages and topping up low wages through tax credits.

Teresa Pearce: Many large, profit-making employers currently pay low wages and enjoy a state subsidy of their staff costs via the tax credit system. What ideas and options did the Treasury team consider for clawing back that subsidy from the employers before it decided to take it from the low paid?

Damian Hinds: The hon. Lady highlights an important point and agrees, I think, with the analysis of Alistair Darling who said that an unintended consequence of the tax credit system was that it would end up making that subsidy in this way. We are introducing the national living wage. For someone working full-time, that will be worth £5,200 more in cash terms by the end of the Parliament.

David T. C. Davies (Monmouth) (Con): Does my hon. Friend agree that the number of people losing out will be vastly outweighed by that of those who will benefit from the higher minimum wage, the higher tax threshold, and the incentive to be out there looking for work?

Damian Hinds: I can confirm that, when we take the fiscal measures of the summer Budget altogether, eight out of 10 families will be better off.

21 July 2015 : Column 1356

Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP): The consequence of this Budget is that 1.8 million women in low-paid work across the UK will lose an average of just over £1,000 a year over the next five years. Cuts to child and working tax credits will hit 2.8 million women in total, two-thirds of those affected. Why is it that this Government’s policies are having a disproportionately negative impact on this country’s women?

Damian Hinds: I can confirm that Scotland has the second lowest rate of female unemployment in the European Union, and the second highest rate of female employment. Women will disproportionately benefit throughout the UK from rises in their personal allowance and the introduction of the national living wage.

Gareth Johnson (Dartford) (Con): When tax credits were first introduced by Gordon Brown, he said that it would cost £2 billion a year. It is now costing £30 billion, which is twice the Home Office budget. Surely the prudent thing to do is to address that ballooning expenditure, which too often simply subsidises low-paying employers.

Damian Hinds: My hon. Friend is absolutely right to say that the cost of tax credits has ballooned. They had trebled in the 11 years to 2010. To get the country back into the black, it was absolutely necessary to take control of it, but doing so at the same time as taking these other key measures.

Shabana Mahmood (Birmingham, Ladywood) (Lab): Research from the House of Commons Library shows that the effect of the Chancellor’s decision to increase the tax credit taper from 41% to 48% is that workers earning above the income tax personal allowance threshold will face a marginal effective tax rate of 73% in 2015-16, which increases to a staggering 80% in 2016-17. How does the Minister reconcile the Chancellor’s rhetoric about standing up for workers with the reality of a marginal effective tax rate of 80%, which is a hefty work penalty by any measure?

Damian Hinds: The great reforming summer Budget is an integrated package of measures and people cannot just take one element alone. It includes the new national living wage, the increases in the personal allowance and a lot more support that the hon. Lady did not mention on childcare and on skills building. When all those things are taken together, it is a Budget in which the great majority of people will be better off and more are supported into work.

Shabana Mahmood: High tax rates are normally loathed by Conservative Members, but obviously not when they affect ordinary working people. The Chancellor has been busy trying to suggest that his national living wage will compensate for this work penalty, but he knows that the real living wage is calculated on the basis of a full take-up of tax credits—the very thing he has now cut. Is it not the case that, regardless of the rhetoric, all that this Budget has delivered for ordinary working people in our country is a hefty work penalty and a living wage con?

Damian Hinds: As the hon. Lady knows, the Budget contains a large number of measures to help hard-working families, including the rise in the personal allowance,

21 July 2015 : Column 1357

allowing people to keep more of what they earn. Of course the big reform of universal credit is still to come, and it will further help on incentivising work. Throughout all this it is important to help to support people into work and to see them progressing through the hours, particularly through our increases in childcare support, which are worth thousands of pounds to some families.

Chris Philp (Croydon South) (Con): Does my hon. Friend agree that working families will be enormously helped by the 30 hours per week of free childcare, which, speaking as a father of two-year-old twins, I particularly appreciate?

Damian Hinds: Indeed, families with twins will get double the benefit, but everybody with children aged three and four will get that particular benefit, which is part of a suite of increases in childcare support, including through universal credit and tax-free childcare.

Aggregates Levy

6. Ms Margaret Ritchie (South Down) (SDLP): What assessment he has made of the implications for his policy of the European Commission’s decision that part of an exemption from the aggregates levy constituted unlawful state aid; and if he will make a statement. [901116]

The Exchequer Secretary to the Treasury (Damian Hinds): In March, a European Commission state aid investigation into the aggregates levy exemptions found almost all of them to be lawful. The Chancellor announced in his summer Budget that these lawful exemptions will be reinstated from August. However, the Commission decided that part of the exemption for shale aggregates provided unlawful state aid. Her Majesty’s Revenue and Customs is in contact with potentially affected businesses, and we will minimise the impact as far as possible.

Ms Ritchie: I thank the Exchequer Secretary for his answer. He will be aware that shale is fundamental to the quarrying industry in my constituency, so can he explain to the House: what persuasive case was made by the Treasury to the Commission in that regard?

Damian Hinds: I appreciate how important the shale industry is in County Down. Of course we are very disappointed that the Commission made this judgment on part of the shale exemption, having previously found all the exemptions to be legal in 2002. I say to the hon. Lady that if any businesses in her constituency have particular issues to raise, they should talk to HMRC, and it will continue to provide support through the staged payments of other taxes through the time to pay scheme.

Business Support

7. David Rutley (Macclesfield) (Con): What fiscal steps he is taking to support businesses. [901117]

The Financial Secretary to the Treasury (Mr David Gauke): In addition to the measures we took in the last Parliament, in the summer Budget we announced that we will: cut the main rate of corporation tax to 19% in 2017 and 18% in 2020; publish a business tax road map

21 July 2015 : Column 1358

by April 2016, giving businesses the certainty they need to plan for long-term investment; support business investment by increasing the annual investment allowance from £25,000 to £200,000—its highest ever permanent level; and increase the employment allowance from £2,000 to £3,000.

David Rutley: The announcement that national insurance and corporation tax will both be further lowered will be welcome news for businesses in my constituency and across the country, as we take forward our long-term economic plan. The Labour party went into the election promising to increase tax on businesses. Does my hon. Friend agree that that is the wrong approach and that it is by lowering taxes that we best back businesses to create the jobs needed by our families?

Mr Gauke: First, may I express my sympathies to my hon. Friend’s constituents affected by the tragic incident in Bosley on Friday? I know he raised that matter in the House yesterday. I agree with him that if we want to improve investment in the UK, and therefore productivity, we should be looking to cut corporation tax, not raise it. It would have been a big mistake to have reversed the progress we have made.

Clive Efford (Eltham) (Lab): Actually, Labour’s plan at the last election was to cut business rates for small businesses. The Chancellor neglected to mention business rates in the Budget, so can the Minister tell us how the review is going and give us a guarantee that it will not result in an increase in business rates?

Mr Gauke: I have to remind the hon. Gentleman that Labour’s manifesto included a plan to increase corporation tax. A review of business rates is being undertaken, and it will report by the end of the year. Remember that it was the previous Government who in 2013 announced a package of business rates cuts worth £2.7 billion, and only this April we introduced a further set of measures that reduced business rates by £1 billion, so we have a proud record on this.

18. [901129] Steve Double (St Austell and Newquay) (Con): Small businesses are the backbone of our economy in Cornwall. While many are thriving under the policies of this Government, those in the tourism industry are experiencing a downturn in business as a result of families not being able to take their children out of school during term time. Is the Minister prepared to meet me to look at the economic impact that policy is having on the Cornish economy and the challenges those businesses are facing?

Mr Gauke: Pupils should be in school during term time, and we believe that needs to be properly enforced. We have said that schools should have greater flexibility in setting their own term dates, which might help address the matter. I am happy to meet my hon. Friend to discuss this, but I know that he has already done so with Education Ministers.

Alison McGovern (Wirral South) (Lab): Let me bring the Minister back to the important issue of business rates, because we have a crisis on our hands. There are reports that the valuation office is now having to deal with 500 appeals a day. Will he just throw businesses a

21 July 2015 : Column 1359

rope? They do not believe that the Government will change a thing, so will he offer them an interim report on their review in September?

Mr Gauke: We are pressing ahead with various proposals to improve the administration of business rates, but I remind the House that it was the previous Government who brought in measures such as the rebate for retail and the 2% cap, so we have introduced measures to help on business rates and we are introducing measures to improve their administration as well.

Employment Support Allowance

8. Dawn Butler (Brent Central) (Lab): What discussions he has had with the Secretary of State for Work and Pensions on the effect of proposed changes to employment support allowance on levels of employment. [901118]

The Chief Secretary to the Treasury (Greg Hands): We created 2 million jobs in the previous Parliament, and our objective is to create a further 2 million in this Parliament. A crucial part of that is the welfare reforms that we have introduced to help make work pay, which is consistent with our long-term economic plan.

Dawn Butler: Of course we all want to see work pay, but a large section of the community are sometimes unable to work for short periods of time because of illnesses such as sickle cell disease. The Minister seems to have overlooked that group of people.

Greg Hands: I thank the hon. Lady for her question. Our welfare reforms are based on the principle of fairness; fair on those who receive the benefits and fair on those who pay the tax. With regard to a specific group, there is clearly a difference between the work-related activity group and the support group, and we are happy to look at those differences. She is clearly not satisfied with what we are doing, but she is also one of the 48 Labour Members who rebelled last night on welfare, so I do not think that she is satisfied with her Front Benchers’ position either.

Small Businesses

9. William Wragg (Hazel Grove) (Con): What fiscal steps he is taking to support small businesses. [901119]

The Financial Secretary to the Treasury (Mr David Gauke): Small businesses are the lifeblood of our economy and the Government are committed to helping them grow and prosper. In the summer Budget we announced that we will increase the employment allowance from £2,000 to £3,000 to help small businesses with the cost of employment, and support business investment through the highest permanent level for the annual investment allowance. We will also transform the tax system over the course of this Parliament by introducing digital tax accounts.

William Wragg: The Government’s policies are creating a climate of economic confidence. However, they are also having the effect of strengthening the pound against other currencies, particularly the euro, which many small exporters in my constituency tell me is making the price of their exports uncompetitive. What advice and

21 July 2015 : Column 1360

support can my hon. Friend give to those small and medium-sized exporters in Hazel Grove so that they can continue to lead our economic recovery?

Mr Gauke: We recognise that the recent weakness in our European trading partners has presented a particular challenge for SMEs trying to export. The Government are working hard to help British businesses export to a wider variety of destinations, contributing to strong recent performance in key emerging markets. That help includes a £20 million package of support this year for first-time exporters, but we need to do more and our productivity plan sets out how we will do that.

Simon Danczuk (Rochdale) (Lab): Will the business rates review help small businesses? It is a simple question for a simply smart Minister.

Mr Gauke: I am grateful for that question—I think. It is a review; I do not want to judge in advance what the conclusions will be, but we have engaged very fully with small business organisations and listen very carefully to what they have to say, and we will report by the end of the year.

Deficit Reduction

10. Rishi Sunak (Richmond (Yorks)) (Con): What progress he has made on his deficit reduction plans. [901120]

The Chief Secretary to the Treasury (Greg Hands): Since 2010, the Government’s long-term economic plan has halved the deficit as a share of GDP, but the job is not yet done. At 4.9%, the deficit remains too high. The summer Budget set out the action that the Government will take to eliminate the deficit and run an overall surplus and start paying down debt. The Government will reduce the deficit at the same rate as over the last Parliament, to reach an overall surplus of £10 billion in 2019-20, according to the forecast from the Office for Budget Responsibility.

Rishi Sunak: Future Governments need flexibility to respond to economic shocks. Does my right hon. Friend agree with me that the Charter for Budget Responsibility and plans to run a fiscal surplus are sensible measures that will provide that flexibility?

Greg Hands: I thank my hon. Friend for that question and he is absolutely right. The reliable way to reduce debt effectively over time is to run a surplus in normal time. Public sector net debt as a share of GDP reached 80.8% last year and the Government are committed to getting debt falling as a share of GDP from here on.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I note that the hon. Member for Richmond (Yorks) (Rishi Sunak) is a new Member. Perhaps he might have forgotten that before 2015, the Chancellor said that he would eradicate the deficit by this election. May I ask the Minister to confirm that due to the recent fiscal changes in his July Budget, the OBR forecast that an additional £26.8 billion would be borrowed by the public sector between 2016 and 2017, and is it not the case that the Government have missed every single one of their deficit reduction targets?

21 July 2015 : Column 1361

Greg Hands: What I can confirm is that the surplus will be higher at the end of the Parliament and debt will be lower. But the hon. Lady was a Member in the last Parliament and she voted against every single one of the spending reductions and other measures that we took to deal with the deficit, and all the time she wanted higher deficits, higher debt and higher spending.


11. Steve McCabe (Birmingham, Selly Oak) (Lab): What estimate he has made of the net change in revenue to the public purse that will arise from tax changes announced in the summer Budget 2015. [901122]

The Financial Secretary to the Treasury (Mr David Gauke): The change in revenue from tax changes announced in the summer Budget is shown in the Budget document. It shows that net receipts increase by between £4 billion and £6.5 billion in each full year of the forecast period. The Government pledged to raise £5 billion per year from tax. The measures announced in the Budget mean that by 2019-20, the Government will have delivered on their targets, raising £5 billion from avoidance and tax planning, evasion and compliance, and imbalances in the tax system.

Steve McCabe: Ernst and Young points out that the rise in household taxes is reducing disposable income, with £47.2 billion of tax rises, including the insurance premium tax and vehicle excise duty. Does the Minister accept that over the course of this Parliament, these tax rises are twice as big as any tax cuts?

Mr Gauke: We said at the election that we would raise a further £5 billion in tax, but we have one question from a Labour MP complaining about the deficit being too high, we have Labour voting against any measures to control spending, and now we have Labour complaining about any tax increases. So where do they stand? We failed to find coherence from the Labour party in the last Parliament and there is no sign of it in this Parliament.

20.[901131] Mr Peter Bone (Wellingborough) (Con): Over this Parliament, the UK will pay £27 billion more in EU contributions because the EU has failed to cut farm subsidies. Would it not help our revenues if the EU actually kept their word?

Mr Gauke: My hon. Friend is of course aware of the historic deal that the Prime Minister achieved in February 2013, when for the first time ever we saw a real-terms cut in the EU budget. That was a significant achievement, and we obviously want to preserve and build on it.

Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP): The Chancellor has made some noise—indeed, the Minister mentioned this—about closing tax avoidance schemes exploited by private equity and hedge fund managers, specifically the “Mayfair” tax loophole. Can he confirm that he intends to close these loopholes?

Mr Gauke: We achieved a huge amount in the previous Parliament on tax loopholes. In the Budget, the Chancellor set out plans for additional resources for Her Majesty’s Revenue and Customs to raise even more in dealing with tax avoidance and tax evasion. The particular

21 July 2015 : Column 1362

example that the hon. Gentleman mentions relates to the long-standing treatment of the capital gains tax applying to private equity—something that has existed for many years and applied in most other countries. The Budget contained a number of measures that were designed to close loopholes for the private equity and hedge fund industries.

Employment Trends

12. Victoria Prentis (Banbury) (Con): What assessment he has made of recent trends in the level of employment. [901123]

The Exchequer Secretary to the Treasury (Damian Hinds): Employment stands at 31 million having increased by 265,000 over the past year, driven entirely by more people being in full-time work. We are now moving into the next phase of our recovery, with high-quality employment helping to boost productivity and raise living standards across the country.

Victoria Prentis: The security of a good job and a regular pay packet are of fundamental importance to people in my constituency. Can my hon. Friend assure us that he will keep backing business across the country to create more jobs?

Damian Hinds: I can. The Government’s long-term economic plan is working. Since 2010, we have seen the creation of 1,000 new jobs a day, but the job is not yet done. The Government will continue working through the plan to secure Britain’s economic future.

Andrew Gwynne (Denton and Reddish) (Lab): The Minister will know that the OBR analysis shows that the number of high-skill jobs in the UK economy is shrinking at a time when the number of low-skill jobs is increasing. Is he proud of that record?

Damian Hinds: There has been a growth in the number of jobs in low and medium-skill sectors, and we should all welcome that. [Interruption.] I am sorry—I meant high and medium-skill sectors. The Government’s focus on the productivity plan is all about making sure that as we move into the next phase we are boosting those highest-value-added sectors.

22. [901133] Simon Hoare (North Dorset) (Con): May I point out to the Minister that jobs in the agricultural, food production and dairy sector are of vital importance to my constituents in North Dorset? Will he ensure that the Treasury team do as much as they possibly can to support those vital sectors?

Damian Hinds: Indeed. The food sector, from farming through to retail and catering, is hugely important, contributing £103 billion to the economy and employing one in eight people. In fact, food and drink manufacturing is the UK’s largest manufacturing sector. We will absolutely continue to keep its importance, in Dorset and more widely, at the front of the plan.

George Kerevan (East Lothian) (SNP): Perhaps the Minister has forgotten that unemployment in the UK rose in the three months to May—the first rise in

21 July 2015 : Column 1363

two years—but actually fell in Scotland. Will he now go to Scotland to talk to the First Minister about her long-term plan for growth?

Damian Hinds: With the growth and employment levels that we have seen in Scotland, it becomes increasingly difficult every day for Scottish National party Members to continue to peddle their line, although I am sure they will. It is true that in the most recent short-term figures there was a slight adverse movement. As we move closer to full employment, we will not see the same large increases in employment every month, but year on year, as the hon. Gentleman will know, the position has improved.

Export Target

13. Geraint Davies (Swansea West) (Lab/Co-op): What assessment he has made of the likelihood of the Government meeting its 2020 export target. [901124]

The Economic Secretary to the Treasury (Harriett Baldwin): The 2020 export target of £1 trillion is ambitious. UK Trade & Investment has doubled the number of businesses it helps since 2010. The productivity plan sets out steps to take this further by mobilising the whole of Government behind helping our great British businesses to export much more.

Geraint Davies: Britain needs export growth, not just cuts, to clear the deficit, but the Chancellor is set to miss his export target by a massive £350 billion and to deliver the worst peacetime trade deficit since 1830. What action are the Government taking to combine the creative industries with our manufacturing base to target emerging middle classes in BRIC countries—in particular, China and India—to fire up growth and not rely solely on hitting the poor with cuts?

Harriett Baldwin: We can see the disarray in the hon. Gentleman’s personal life, given that he walked through the Lobby to support one leadership candidate last night, while publicly backing another who abstained. He mentions the importance of exporting to emerging markets. I can confirm that UK exports to China have increased by 72% since 2010, while exports to South Korea—many of them in the creative industries—are up by 148% and to Hong Kong by 63%.

Mr David Nuttall (Bury North) (Con): Does my hon. Friend agree that British business would find it easier to export to the rest of the world if it did not have to comply with the red tape imposed on it by Brussels bureaucrats?

Harriett Baldwin: My hon. Friend is an example to Opposition Members in the consistency of his political viewpoint. He is right to point out that the euro area has indeed been sluggish. One of the reasons we are experiencing slow growth in the euro area is that our goods exports have been falling to that part of the world. That is why it is so important that we refocus British businesses on exporting to some of the faster growing parts of the world.

16. [901127] Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): That was an extraordinarily complacent answer from the Minister. On this Chancellor’s watch,

21 July 2015 : Column 1364

the UK’s current account deficit has become the largest of any advanced economy, and the value of UK exports is largely what it was in 2010, when the Government came to power. Crucially, that cannot be put down to the sluggishness of the eurozone, because exports to non-eurozone countries have been equally static, and the figure the Minister gave for China reflects demand in the Chinese economy. Does she accept that whatever the strategies the Government have deployed so far, they simply have not worked?

Harriett Baldwin: I am glad that the hon. Gentleman shares my view that it is very important for us to help British businesses to export more. We have some fantastic British businesses, and many of them have started to export. UKTI has doubled the number of companies that it has helped in the past five years. He is absolutely right that we should aim to be very ambitious in this area. I would like to point out that export volumes outside the EU have actually grown by 24% since the first quarter of 2008.

Rebalancing the Economy

14. John Pugh (Southport) (LD): What steps he is taking to rebalance the economy away from London and the south-east. [901125]

The Economic Secretary to the Treasury (Harriett Baldwin): The Government are committed to rebalancing the economy and strengthening every part of the UK. The summer Budget announced new commitments to rebalance the economy, including devolving further powers to city regions, inviting a new round of bids for enterprise zones and launching an ambitious transport package for the north of England.

John Pugh: I thank the Minister for that response. Currently, northern cities with elected Mayors have below-average economic performance in their region, whereas northern cities with above-average performances do not yet have elected Mayors. Why are the Government making a fetish of elected Mayors?

Harriett Baldwin: I know the hon. Gentleman has a long-standing point of view in this regard. The important point is that we want to empower local economic areas to grow as fast as London and the south-east. Among the important measures in the Cities and Local Government Devolution Bill are the strong and accountable governance arrangements for, for example, Mayors.

Mr Speaker: Last but not least, I call Mr Green.

Wage Growth and Inflation

15. Chris Green (Bolton West) (Con): What comparative assessment he has made of the rates of wage growth and inflation. [901126]

The Exchequer Secretary to the Treasury (Damian Hinds): The hard work on economic recovery is now paying off as people see their pay packets growing faster. The most recent data show real pay growing at 3.2%. Inflation is low: the price of fuels has fallen by 10.5% in the past year and the price of food by 2.2%.

21 July 2015 : Column 1365

Chris Green: As the MP for Bolton West, I strongly welcome the Government’s northern powerhouse plans to invest in transport infrastructure and in science and skills. What are the Government doing to ensure that Bolton West is increasingly attractive as a place for high-tech business to invest, so bringing in high-skilled jobs and higher wages for my constituents?

Damian Hinds: The Budget contained measures that will boost skills and support high-tech businesses across the north, including in my hon. Friend’s constituency. Greater Manchester local enterprise partnership is invited to bid in the new round of enterprise zones, there will be new regius professorships to support universities and there is an ambitious transport package that will provide much needed infrastructure for the north of England.

Topical Questions

T1. [901136] Ian Blackford (Ross, Skye and Lochaber) (SNP): If he will make a statement on his departmental responsibilities.

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): The core purpose of the Treasury is to ensure the stability and prosperity of the economy.

Ian Blackford: We hear from the Institute for Fiscal Studies that the gross impact of the higher minimum wage will be about £4 billion, but that the cuts to tax credits represent about £6 billion. The proportion of children in poverty who are from families in work rose from 54% to 63%, and that statistic can only get worse. It is little surprise that the Government want to redefine child poverty. To change a definition is to change the truth—

Mr Speaker: Order. I thought the hon. Gentleman had a background in the financial world. He cannot have been allowed to prate on at that length when he was busy making important decisions with commercial substance involved. He will really have to practise.

Mr Osborne: Let me give the hon. Gentleman a figure: 200,000 workers in Scotland will gain from the new national living wage, which is 9% of the workforce. The Budget is offering people in Scotland and across the United Kingdom higher wages, lower taxes and, yes, lower welfare, as part of a new contract whereby this country lives within its means. That is one reason why jobs are being created in Scotland.

T2. [901137] Luke Hall (Thornbury and Yate) (Con): I welcome the Chancellor’s recent announcement on Sunday trading hours. What steps can he take to ensure that neighbouring authorities take a joined-up approach, so that consumers have confidence in the consistency of Sunday trading hours and we provide the maximum possible benefit to our economy?

Mr Osborne: I remember visiting a vibrant high street in my hon. Friend’s constituency before the general election. It is for local areas to decide whether to extend Sunday opening hours and to work in partnership with other local authorities. My personal view is that doing so will help to protect the high street because an increasing

21 July 2015 : Column 1366

amount of online shopping is done on Sundays. However, it will be for local people and local authorities to make that decision.

T5. [901142] Kate Osamor (Edmonton) (Lab/Co-op): The Treasury loses out on hundreds of millions of pounds each year by allowing high-earning hedge fund managers to pay capital gains tax at 28%, rather than income tax of 45%, on carried interest payments. Does the Chancellor agree that we should close that loophole so that we can invest the money in properly paid apprenticeships and tackling child poverty?

Mr Osborne: Under the last Labour Government, such people were paying 18% tax. Indeed, people in the City boasted that they were paying lower tax rates than the people who cleaned for them. We have changed that and increased the capital gains tax rate to 28%. As a result of the Budget, we are also insisting that that rate is paid across the venture capital industry.

T3. [901138] Rebecca Pow (Taunton Deane) (Con): I am delighted that in the Budget an allocation of £7.2 billion was made for transport infrastructure in the south-west. Will the Chancellor kindly confirm that that allocation includes funding for the much needed upgrade of the A358, the Henlade bypass and junction 25 of the M5, all of which will pave the way for a new strategic employment site?

Mr Osborne: The short answer is yes. All those vital projects for Somerset and the south-west are included in a massive investment in the transport of the south-west.

T7. [901144] Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): How can the Chancellor justify making people who go out to work worse off while he spends £1 billion on cutting inheritance tax for people who are already wealthy? That is not rewarding hard working; it is rewarding the fortunate few.

Mr Osborne: We have increased the personal allowance, taking low-paid people out of tax, and we are now introducing a national living wage, but we make no apology for supporting aspiration and the human instinct that people have to pass something on to their children. If the Labour party is against that as well, it really is moving backwards rather than forwards.

T4. [901140] Tim Loughton (East Worthing and Shoreham) (Con): The Chancellor’s announcement on the living wage was widely welcomed, but what assurances can he give to residential care homes that offer subsidised places, of which there are many in Worthing, which will suffer from the proposed changes but will not benefit on the other side from the record reductions in corporation tax?

Mr Osborne: The reduction in corporation tax now applies to small companies as well as larger ones, and we have increased the employment allowance, which will help with the national insurance bills of companies in my hon. Friend’s constituency. We are of course aware of the pressures on the social care system, and that is one thing we will address in the spending review.

21 July 2015 : Column 1367

Mr Virendra Sharma (Ealing, Southall) (Lab): The Institute for Fiscal Studies pointed out last week that although the number of workless households in poverty has fallen, that fall has been matched by a rise in the number of working households in poverty. Will the Chancellor acknowledge the scale of in-work poverty, and does he accept that cutting tax credits for working families and repealing the child poverty legislation will make the situation worse, not better?

Mr Osborne: I do not accept that cutting people’s taxes and introducing a national living wage will in any way hurt working people—it will help working people. The people who suffer most when we cannot afford Government services and welfare are the poorest in our country, and we saw that when Labour was in office. We have taken the approach of entrenching economic security by making sure that Britain lives within its means. Last night this House voted through the important welfare package. Now we have launched the spending review to finish the job.

T6. [901143] Andrew Stephenson (Pendle) (Con): The announcement that the free childcare available for working parents of three and four-year-olds will double to 30 hours a week in 2017 is excellent news for families across Pendle. Does not the fact that we are delivering that commitment demonstrate that only by taking tough decisions can we afford to provide the high-quality services that hard-working families deserve?

Mr Osborne: My hon. Friend is right, and he does a brilliant job representing his constituents, bringing in investment, and supporting working people in Pendle. Working parents now have the added help of 30 hours of free childcare, which his Labour opponent in Pendle—and indeed Opposition Members here—have still failed to welcome.

Sammy Wilson (East Antrim) (DUP): The Northern Ireland Assembly faces a £600 million overspend on its budget this financial year as a result of the blocking of welfare reform changes. What steps does the Chancellor intend to take to deal with this fiscal anarchy that is causing disruption in schools and hospitals and for all those who depend on public spending, and drives a coach and horses through spending limits?

Mr Osborne: We are well aware of the difficult situation with the finances of the Northern Ireland Executive, and of the objections in some quarters of the Assembly to what are, I think, sensible welfare reforms that will help people in Northern Ireland into work. We are working with the First Minister and the Deputy First Minister to resolve that impasse, but it is clearly not sustainable to allow a devolved Administration to ignore the controls placed on them. I know that the hon. Gentleman and his party support that position, and we are working with him, and others, to resolve the issue.

Huw Merriman (Bexhill and Battle) (Con): Will my right hon. Friend continue to encourage Opposition Members to support our Budget proposals, noting that the legislation for a budget surplus comes before the House later this year?

21 July 2015 : Column 1368

Mr Osborne: There will be another interesting question for this House when we vote on the new fiscal rules. Two weeks ago the shadow Chancellor said that he supported a surplus, yet he has objected to every single welfare change that is being introduced in this House, and he refused to support our legislation last night. We shall see what he says about the spending review in the next few hours, but we cannot will the ends if we do not will the means, and that means difficult choices to ensure that our country lives within its means.

Paula Sherriff (Dewsbury) (Lab): This Chancellor has missed every one of his own deficit reduction targets, and borrowed more than any other Chancellor in history. Will he confirm that, according to the Office for Budget Responsibility forecast, the fiscal changes in the summer Budget mean £26.8 billion more public borrowing in the next two financial years, and that since 2010 he will have borrowed a full £200 billion more than he planned?

Mr Osborne: I think that is exactly the same question that was read out about half an hour ago—I am not sure that it says much for improved productivity on the Labour Benches.

Martin Vickers (Cleethorpes) (Con): In her reply to my Westminster Hall debate last week, the Economic Secretary to the Treasury spoke warmly of bank sharing. Will she join me in encouraging HSBC and NatWest, which are proposing to close their branches in Barton-upon-Humber, to delay that closure so that sharing can be seriously considered?

The Economic Secretary to the Treasury (Harriett Baldwin): Residents in Barton-upon-Humber are very fortunate to have such a champion as my hon. Friend representing their interests. I am sure that as he has raised the matter in the House the banks in question will have noted his point, and he has represented his constituents well.

Mr Speaker: I call Callum McCaig. No? I call Mr Skinner.

Mr Dennis Skinner (Bolsover) (Lab) rose—

Mr Speaker: May I reassure the hon. Gentleman that I was not confusing him with Mr McCaig? I thought Mr McCaig wished to ask a question earlier. The hon. Gentleman is unique, we all know who he is and we want to hear him.

Mr Skinner: And I am a little bit older than him.

Mr Speaker: I was too polite to make that point.

Mr Skinner: I can do it any day of the week.

Has the Chancellor of the Exchequer not got a bit of a cheek to be constantly using Question Time to attack the Labour leadership elections—[Interruption.] Take your time! The Chancellor is involved in an election himself. Every time he opens his mouth, it is directed towards the hon. Member for Uxbridge and South Ruislip (Boris Johnson) and the Home Secretary. Does he not realise that the Home Secretary has already knocked him out with the water cannon? Remember,

21 July 2015 : Column 1369

some of us are watching that contest very carefully. The Chancellor should be careful he does not knock himself out.

Mr Speaker: With particular reference to his Treasury responsibilities, I call the Chancellor of the Exchequer.

Mr Skinner: He started it: you heard him!

Mr Speaker: I hear everything in this Chamber.

Mr Osborne: What the hon. Gentleman and the Labour party fail to understand is that we cannot stand up for working people unless we create a strong economy that lives within its means. I would only make this observation: he has a Labour party he is very happy with now, and so do I.

Lucy Frazer (South East Cambridgeshire) (Con): Does the Chancellor agree that the national living wage will not only improve the lives of working people on lower incomes but will improve the gender pay gap, because it is often women who are the worst paid?

Mr Osborne: My hon. and learned Friend is right. The good news is that the gender pay gap is at its lowest level in history, but we have more work to do and that is why we have introduced the new audits for companies. Of course, women will be the biggest group of winners from the national living wage.

Mrs Emma Lewell-Buck (South Shields) (Lab): I listened to the Minister and Chancellor talking about tax credits earlier, but here is a bit of reality. A couple in my constituency told me that as carers for a disabled child, they work part time and will lose around £2,000 in tax credits under the Chancellor’s reforms. But they will not benefit from a higher minimum wage because their jobs are professional level and their hourly pay is already above that rate. Does the Chancellor think it is fair that his reforms will make families with disabled children poorer?

Mr Osborne: We have to look at the entire Budget package, because that is the new contract. Part of that is a tax cut, which I suspect will help the hon. Lady’s constituents, because we have increased the personal allowance. They may also be eligible for the new 30 hours of free child care. Many more of her constituents will

21 July 2015 : Column 1370

also benefit from the national living wage. But what is the alternative? It is to have an unsustainable welfare system, the cost of which goes up and up and squeezes out spending on infrastructure, education and science, and puts our country at risk from economic storms abroad. That is what we lived through 10 years ago and we do not want to go back there.

Mr Nigel Evans (Ribble Valley) (Con): The Chancellor is the darling of beer drinkers throughout the country, with his three tax cuts on beer and getting rid of the tax escalator. Will he continue his support for the brewing industry? Should he do so, it may even help any leadership bid that he may or not make at some time in the future.

Mr Osborne: I shall take that as an early representation for next year’s Budget. We have been able to help by reducing beer duty and ending the beer duty escalator that was putting pubs out of business. Other measures, such as those on apprenticeships and the employment allowance, are also helping the pub industry which is such a big employer of young people in our country.

Margaret Ferrier (Rutherglen and Hamilton West) (SNP): The Scottish renewables sector supports more than 11,000 jobs, as well as contributing to a sustainable economy. Will the Chancellor please explain his reasoning for the removal of the climate change levy exemption for renewables, and tell the House whether he plans to start charging alcohol duty on soft drinks next?

Mr Osborne: I can certainly rule out the latter point. The point about the renewables levy is that it was introduced before the framework that we now have in place to support long-term investment in renewable energy through the levy control framework and the renewables obligation. We found that a third of the money, which after all comes from the electricity bills paid by the people we represent in Parliament, was going to overseas generators, so it was not really a fair approach. The approach we are taking now—supporting long-term investment in renewables and building up the UK industry—is the right one.

Several hon. Members rose—

Mr Speaker: Order. I am sorry to disappoint remaining colleagues. Treasury questions is a box office occasion and demand tends always to outstrip supply. We must now move on.

21 July 2015 : Column 1371

DWP Data

12.35 pm

Debbie Abrahams (Oldham East and Saddleworth) (Lab) (Urgent Question): To ask the Prime Minister to make a statement on his commitment of 24 June to publish Department for Work and Pensions data on the number of people in receipt of employment and support allowance and incapacity benefit who have died since November 2011, including those found fit for work.

The Minister for Employment (Priti Patel): The Government intend to publish mortality statistics, but before doing so the statistics need to meet the high standards expected of official statistics. Once we have completed that important work, we will publish them.

Debbie Abrahams: Thank you, Mr Speaker, for granting this urgent question.

I am disappointed that the Prime Minister is not here in person to explain why he has not yet honoured his commitment of 24 June to publish the data. On 30 April, the Information Commissioner ruled that the Department for Work and Pensions should publish data on the number of people in receipt of employment and support allowance and incapacity benefit who have died since November 2011, including those who had been found fit for work. The Government have since appealed the decision, stating in their appeal that the publication would be

“contrary to the public interest”

and that the publication of mortality statistics is “emotive”. To date, more than 240,000 people have signed a petition calling for the Government to publish the data.

As the House will be aware, on 24 June the Prime Minister was asked, at Prime Minister’s questions, by my hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) about the publication of the data. He said:

“let me reassure the hon. Lady that the data will be published; they are being prepared for publication as we speak. I think that it is important that we publish data, and this Government have published more data about public spending than any previous Government.”—[Official Report, 24 June 2015; Vol. 597, c. 886.]

I have since raised this issue in two points of order, at a Westminster Hall debate on 30 June, by writing directly to the Prime Minister and by tabling a named day written question to him, which his office decided to transfer to the Department for Work and Pensions and to which I received a non-answer yesterday from the Minister for Employment.

I have some specific questions. First, when will we see the data published, including on those who have been found fit for work, given the Prime Minister’s comment of nearly four weeks ago? When are they being prepared for publication? Secondly, will the Minister commit to publishing the actual numbers of deaths, as well as the DWP’s proposed age standardised mortality rates, as they did in 2012 when the actual number of deaths was published?

Thirdly, will the Minister inform the House how much the Secretary of State’s Department has spent on staff and legal fees in the decision to refuse the initial freedom of information request and now to contest the Information Commissioner’s ruling? Fourthly, will the

21 July 2015 : Column 1372

Secretary of State reconsider his decision not to publish the details on any of his Department’s 49 peer reviews into social security claimants who died, including, most importantly, changes his Department has brought forward as a result of them?

Finally, what assessment has been undertaken on the potential impact on the health status of those on incapacity benefit or employment and support allowance, given the measures introduced in the Welfare Reform and Work Bill?

Just four weeks ago, the Prime Minister promised urgent action. Now is the time to deliver—to be open, transparent and publish the numbers the public and Parliament are calling for. Without that, this House is brought into disrepute.

Priti Patel: I cannot be clearer than the Prime Minister, who last week set out the position very clearly. The data—[Interruption.] Would Labour Members like to listen to my response before they start chuntering away? I will restate what I said in my initial response: the data will be published and are being prepared for publication as we speak.

Dawn Butler (Brent Central) (Lab): When?

Priti Patel: If the hon. Lady will let me respond, I will tell the House exactly that.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): Arrogant.

Alec Shelbrooke (Elmet and Rothwell) (Con): You are the Father of the House!

Priti Patel: If I may respond directly—

Mr Speaker: Order. I respect the fact that the hon. Member for Elmet and Rothwell (Alec Shelbrooke) is trying to help his Minister, but he should calm down, as should everybody. Let us hear the Minister’s answer.

Priti Patel: The position on data publication has not changed. The data are being finalised and will be published shortly. They will be published very soon, and no later than the autumn.

I say to Labour Members chuntering away and shaking their heads that Labour had 13 years to publish the data and failed to do so. Is it any coincidence that they are now showing some interest in this area?

Dawn Butler indicated dissent.

Priti Patel: I say to the hon. Member for Brent Central (Dawn Butler) that we were the first Government to publish ad hoc statistics in this very area. [Interruption.] Labour Members are shaking their heads because they do not like the fact that we have published data previously.

Dawn Butler: Misleading.

Priti Patel: I say to the hon. Lady chuntering away that I am not misleading the House. I am informing the House that data publication will happen. I restate for the benefit of all Members that the data will be published no later than the autumn. We were the first Government

21 July 2015 : Column 1373

to publish ad hoc statistics in this area, and I think this is quite audacious of the Labour party, given that it never published any such information when in government.

Several hon. Members rose

Mr Speaker: Order. I wish to say two things. First, I remind the House that moderation and good humour are underlined in “Erskine May”as being of the essence of good parliamentary proceedings. Secondly, it is important to say at the start that this urgent question is a narrow one, not an opportunity for a general exchange about employment support allowance or incapacity benefit, or the merit or demerit of the Government’s policies on those matters. There have been many such debates. This is an occasion for a narrow focus on the issue of data, upon which the urgent question was focused, so our proceedings will be tightly constrained. I do not intend there to be long exchanges on this matter. Perhaps we can be led, in a statesman-like manner, from the Government Back Benches by Dr Andrew Murrison.

Dr Andrew Murrison (South West Wiltshire) (Con): My right hon. Friend will be aware of the well-established link between good health, particularly good mental health, and work. Will she ensure that in the long term her Department gathers information that will support or refute that assertion?

Priti Patel: Absolutely; we will be doing exactly that.

Kate Green (Stretford and Urmston) (Lab): There is huge disquiet among disabled people, as story after story surfaces in the media about disabled people being found fit for work and dying shortly afterwards—last week another story appeared in the Daily Mirror about a disabled man who died two weeks after his assessment. The shenanigans in the DWP around the release of the statistics are concerning—and puzzling, if the Department has nothing to hide. First, the Secretary of State told Parliament that the DWP did not collect the data, in the teeth of the Information Commissioner’s ruling to release them. Within days, he was flatly contradicted by the Prime Minister, and now we hear that the DWP is appealing publication of the data that the Secretary of State first said were not collected.

Will the Minister come clean before the House? She said the data would be published “shortly”, “very soon” and “no later than the autumn”. Why is it taking so long? On what grounds is the DWP appealing publication, and will the data, when eventually published, be timely? It is feared that by the time this procrastination has finally resulted in publication, the data will be so out of date as to be pretty well useless. Will the raw data be published, and what analysis will accompany them to meet the high standards for the publication of Government statistics to which she claims the Department aspires? Finally, will she explain why the Secretary of State first claimed the data were not being collected, when blatantly they were and are, as he now apparently acknowledges?

Priti Patel: I thank the hon. Lady for her comments. I think it is fair to say that, as I stated earlier, the Government are going to publish these statistics. Despite the scaremongering and the gross misrepresentation from the Opposition—scaremongering about suicides, I should hasten to add, which is a complete misrepresentation

21 July 2015 : Column 1374

—I should say that Labour introduced the work capability assessment back in 2008, and at that time Labour Members did not say that it was leading to people committing suicide.

When it comes to publication, this is complex statistical information. As the hon. Lady and, I am sure, all Opposition Members will know, we are bound as a Department by the Statistics Authority on the quality of information that is published, so it is very important that we get this right. Let me emphasise that officials are working as we speak to prepare the data, and we will be publishing them very soon. I have said it already and I will say it again: we will publish before the autumn this year, and once the data are published I will be very happy to take questions on the content and any other aspect of the data that the hon. Lady and hon. Members see fit.

Mark Spencer (Sherwood) (Con): Will the Minister commit to releasing data pre-2010, from under the previous Labour Government, who introduced work capability assessments, so that we can fully assess the impact that the Labour party’s policy had?

Priti Patel: I thank my hon. Friend for his question. When we publish the data, they will cover all the relevant periods to which he has referred.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): I wish my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) every good fortune in awaiting a reply to a letter to the Prime Minister, in view of the fact that in the last five years I have had exactly one letter from him, and that was after I had received a letter from No. 10 signed by somebody who did not exist.

I say to the junior Minister that she needs to take some lessons from her boss in dealing with questions in this House, because whatever the nature of his replies, he replies with courtesy. She needs to learn about that as well. Let me put it to the junior Minister that yesterday the Government broke a pledge about providing information and conducting consultation, and today we have a further example of the Government breaking a pledge. Will she explain whether this is simply arrogance or incompetence?

Priti Patel: With courtesy to the Father of the House, I would re-emphasise that the data will be published, and when they are published, he can review them.

David T. C. Davies (Monmouth) (Con): Does my right hon. Friend agree that any death is of course a tragedy, but that individual tragedies should not simply be rolled into a set of statistics and then plucked out by people who obviously have a political agenda to push?

Priti Patel: My hon. Friend raises a very valid point. When it comes to deaths, these are personal and individual tragedies, in circumstances—[Interruption.]

Mr Speaker: Order.

Priti Patel: These are personal and individual tragedies that affect both the individual and, obviously, their families as well. It is absolutely wrong for any political

21 July 2015 : Column 1375

party to engage in handwringing and scaremongering to the extent that we have seen in this House.

Chris Stephens (Glasgow South West) (SNP): May I also thank the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for tabling this urgent question and assure her that I am getting the same answers to written questions as she is?

Too often, we hear stories in the media about people who have died having been found fit for work or who have been driven to their deaths by the Government’s pernicious benefits sanctions regime. We have heard from the Department for Work and Pensions that it currently investigates all deaths of benefit claimants

“where suicide is associated with DWP activity”,

and in other cases where the death of a vulnerable benefit claimant is brought to its attention, through a system of internal peer reviews. A freedom of information disclosure shows that, since 2012, the Department for Work and Pensions has carried out 49 peer reviews following the death of a benefit claimant and that 10 of the peer reviewed claimants were sanctioned.

Is the Department for Work and Pensions still pursuing an appeal against the Information Commissioner’s ruling, or is it abandoning it in the light of the data being published? If the Department is going to publish that information, can we be given a clear timetable for the publication of the data, not just “very soon” and “the autumn”, because they are complete opposites?

Lastly, the Minister will be aware that, last June, the Scottish Parliament’s Welfare Reform Committee called for an urgent review of the benefits sanctions and conditionality regime, and in March the Work and Pensions Committee in this place published a report calling for a full independent review of the benefits sanctions process. Having been asked by two cross-party Committees in two Parliaments, will the Government now go ahead with an independent review at the earliest possible opportunity?

Priti Patel: The hon. Gentleman raises a number of points. It is right that the Department reviews complex individual cases, including those in which claimants have died, to ensure that all processes have been followed correctly. As I have said on previous occasions to Scottish National party Members, I am happy to look at specific cases. On the point about sanctions, unemployment benefits have always been conditional, and benefits sanctions have been part of the system for the last four decades, as is right and proper. As regards the appeal and the publication of the data, I have already said that we will, as requested, publish all aspects of the data in the right format as is required of the Department.

Kit Malthouse (North West Hampshire) (Con): I welcome the Minister’s pledge to publish the data in the autumn. Does she agree that, if we are to form a judgment, it is very important that comparative data are published, not least longitudinal data for the cohorts involved, to see whether the situation is improving, and perhaps some international comparisons?

Priti Patel: My hon. Friend is absolutely right, and we will publish all the relevant data in this area.

21 July 2015 : Column 1376

Mr George Howarth (Knowsley) (Lab): Does not the Minister accept that although of course each case is a personal and individual tragedy, we aggregate and analyse data to see whether a pattern emerges? Does she accept that as long as she drags her feet on this issue, people will conclude that the Government may have something to hide?

Priti Patel: On the contrary, I find that question astonishing. I take no lessons in transparency or the publication of data from the Labour party. The last Government were more open and transparent in data publication than any other. In the wider context of statistics, I have said it once and will say it again and again that we intend to meet the high standards expected of official statistics when publishing these data, and that is what we will concentrate on doing.

Paul Maynard (Blackpool North and Cleveleys) (Con): The Minister will be aware that the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) and I sat on the Work and Pensions Committee in the last Parliament and took part in its inquiry into benefits sanctions, which reported just before Parliament dissolved. She will be aware also that we called for the publication of these data, but that we made a more subtle point, which is that the data are meaningful only if they include information about each individual’s experiences before contact with the benefits system. To publish the data in raw form would overlook the integration that they may have with the health service, mental health services and any other public agencies involved before the individual encountered the DWP. Will the Minister ensure that that information is included?

Priti Patel: My hon. Friend, from his time on the Select Committee, knows the significance of such information. He is absolutely right, and we should not make assumptions about such data.

Caroline Lucas (Brighton, Pavilion) (Green): Does the Minister recognise that accusing Opposition Members of scaremongering is hugely insulting to those constituents who have contacted us because they are deeply worried about this matter? Does she recognise that, to them, it looks as though the Government are hiding this information, reinforcing concerns that this is a punitive regime designed to hurt people who are disabled? The Government have already rushed out 17 written ministerial statements today, the last day that the House sits before the recess. Why will the Minister not add a statement on this matter?

Priti Patel: Contrary to the hon. Lady’s point, we will be the first to publish this information. I say again for the record—not for the second, third or even the fourth time—the data are coming. They will be published, and we have nothing to hide.

Dr Tania Mathias (Twickenham) (Con): I agree that transparency is important, but where data are sensitive, their interpretation and the human stories behind them are important too. I have had amazing help from the Minister and the Secretary of State, who have visited my constituency and met individuals with complex

21 July 2015 : Column 1377

needs. I am very grateful for the troubleshooting and assistance being given, and I look forward to that continuing over the summer. While data are important, people’s ongoing needs are important too.

Priti Patel: My hon. Friend will know from her background as a doctor in her constituency that people have different needs, and individual cases are very complex. She is right to say that we can make no assumptions just by looking at data; it is about putting people first and understanding their needs.

John McDonnell (Hayes and Harlington) (Lab): Just over a year ago, 130,000 people signed a petition and there was a debate in the House calling for a cumulative impact assessment by the Government of the welfare changes on people with disabilities. These data are just one element of that. The House decided without opposition that the Government should undertake that exercise. Are they giving any consideration to conducting a cumulative impact assessment?

Priti Patel: The last Labour Government never published a cumulative impact statement, and our focus right now is on publishing this set of data, as we have committed to do.

Jeremy Lefroy (Stafford) (Con): I welcome my right hon. Friend’s announcement that the data will be published soon. Does she agree that, when they appear, it is important that they are analysed and that any lessons are learned, because data are pretty useless if we do not do that?

Priti Patel: My hon. Friend is right. As I have said, data are complex and we should not simply read them and make assumptions; they need analysis.

Rob Marris (Wolverhampton South West) (Lab): I entirely agree that one should not make assumptions and that the last Government had a better record on transparency of statistics than some previous Governments, albeit the Office for National Statistics repeatedly criticised Ministers in the last Government for misusing statistics. The Minister accuses Opposition Members of scare- mongering and hand-wringing, but how can she know—I do not—unless she already has the statistics?

Priti Patel: As I have said, the statistics will be published, and the hon. Gentleman can then make his own informed decision.

Andrew Bridgen (North West Leicestershire) (Con): As the Minister stated, unemployment benefits have always been conditional. Will she tell the House how often these statistics were published by the Labour party when it was in government?

Priti Patel: It is a very short answer—never.

Marie Rimmer (St Helens South and Whiston) (Lab): Will the Minister tell us whether the Government are appealing against the decision on publishing the data, what costs have been incurred and why the Secretary of State did not make the House of Commons aware of the appeal in the first instance, instead of stating that the figures were not being collated?

21 July 2015 : Column 1378

Priti Patel: We will publish the data, and Opposition Members can then make their own judgment.

Tom Pursglove (Corby) (Con): Does my right hon. Friend agree that if inaccurate or rushed data were published, she would then be accused, including by Opposition Members, of gross carelessness, given the sensitivity of those data?

Priti Patel: My hon. Friend makes a valid point. It is hugely ironic to hear the remarks of Labour Members, whose Government never published any information or data in this area. We are expected to meet the high standards required for the official publication of statistics, and that is exactly what this Government will do.

Neil Gray (Airdrie and Shotts) (SNP): With all due respect to the Minister, she has not answered the question asked by my hon. Friend the Member for Glasgow South West (Chris Stephens) and the hon. Member for St Helens South and Whiston (Marie Rimmer). Will she appeal the Information Commissioner’s decision? Will the data be backdated to November 2011? Given that 200,000 people, including many of my constituents, have signed a petition calling for the data to be published, will there be parliamentary time to scrutinise it?

Priti Patel: The data will be published. The urgent question is specifically about the publication of mortality statistics.

Richard Graham (Gloucester) (Con): I welcome the Minister’s announcement that she will provide the data requested and will look at it analytically, in the way that other Members have suggested. Does she share my slight concern that the phrasing of the urgent question, particularly the inclusion of the words “found fit for work”, implies something sinister? We all know of people not only found fit for work but actually working and fit while working who have died in sad circumstances, including former Members of the House. This issue should be handled very sensitively when the data emerge.

Priti Patel: My hon. Friend has made a valid point. I think it is fair to say that the fit for work assessment was introduced by the Labour Government. Our focus now is on the fact that—I remind the House—those data are coming, and will be published before the autumn.

Mr Gordon Marsden (Blackpool South) (Lab): DWP Ministers tried to sit on information from internally generated data which suggested that one in five deaths of benefit claimants had been linked to sanctions. Perhaps we can be forgiven our scepticism about the Minister’s definition of autumn: after all, this Government publish their autumn statements in December.

More important, what steps will the Minister take to look into cases that have led from morbidity to mortality? In my constituency, the failure of Atos to pay home visits to severely ill people on some occasions has caused real health problems. A constituent of mine had motor neurone disease, but failed the assessment for employment and support allowance.

Priti Patel: The hon. Gentleman has mentioned Atos. We, of course, terminated that contract. [Interruption.] It was part of the Labour legacy that we were there to

21 July 2015 : Column 1379

clear up. As for the data, they will be published, and they will be published before the autumn.

Several hon. Members rose

Mr Speaker: Order. I do not intend these questions to last longer than half an hour in total, so there is pressure on colleagues to be brief. I call Mr Skinner.

Mr Dennis Skinner (Bolsover) (Lab): I think the Minister should tell us whether there is to be an appeal. She has been asked that several times, and she has not answered. I am thinking of the family of David Cowpe, who lived in my area, and whose case I raised with the Prime Minister more than two years ago. He lost his sight, he lost his hearing, and then cancer took his life when he had been waiting 11 months for an appeal. A lot of promises have been made, but nothing seems to be forthcoming. I have to say that this delay almost emanates from the Secretary of State, whom I call the Minister for Delay, and it has gone on for too long. I think it is high time that this matter was resolved. I say to the Minister, “Stand up at that Dispatch Box and say that you are not going to appeal, and that you are going to get on with it.”

Priti Patel: The hon. Gentleman has raised the tragic case of his constituent, but he has also raised the need to resolve this matter by publishing data, which is exactly what the Government will be doing.

Nia Griffith (Llanelli) (Lab): This sorry story underlines the immense importance of the role of the Information Commissioner. Can the Minister give us an absolute assurance that, notwithstanding what is in the review, she will not make her Department take any action or demand any changes that restrict the availability of information and data?

Priti Patel: Not only will we publish the data, but we will publish all aspects of the data that we have been asked to publish.

Mr David Anderson (Blaydon) (Lab): Given that autumn lasts from the September equinox until the December solstice, will the Minister spell out exactly what work her civil servants will be doing? She must have some idea of what is needed, because otherwise she would not have specified that timescale. What will those civil servants be doing during the intervening weeks and, possibly, months?

Priti Patel: We will be doing all that is relevant. This is complex statistical information, so it is important that we get it right, and that is precisely what my officials are doing.

Diana Johnson (Kingston upon Hull North) (Lab): Exactly how much have the prevarication and delays cost the British taxpayer?

Priti Patel: There is no prevarication or delay. We have been very clear—[Interruption.] I hear sniggers on the Opposition Benches, but we were the first Government to publish data in this area, and I think it shameful that

21 July 2015 : Column 1380

the Labour party has not done so. This Government now intend to publish the statistics, and that is exactly what we will do.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): Each month the Department for Work and Pensions publishes vast amounts of information on employment figures, wages and benefits. It has always done so, and, by the way, Ministers never seem to be shy about placing their own interpretation on those data. Should it really be so difficult for them to tell us whether people are alive or dead?

Priti Patel: We do not place our interpretation on data that my Department publishes, because we are bound by the UK Statistics Authority when it comes to how they are presented. As I have said, these data will be published. Let me also reiterate once again that ours is one of the most transparent Governments ever, in contrast to the hon. Gentleman’s Government.

Andrew Gwynne (Denton and Reddish) (Lab): The Minister has said that the data will be robust, but I simply do not accept the Government’s narrative that some people in receipt of employment and support allowance or incapacity benefit are not ill, because those are good epidemiological considerations when it comes to public health indicators. Why will the Minister not do the decent thing and publish the data in full today?

Priti Patel: I am sorry that the hon. Gentleman was disappointed by my response, but the data will be published. He should remember, when he criticises these schemes, that his Government set them up prior to 2010, and that it is we who are reforming the mess that we inherited.

Steve McCabe (Birmingham, Selly Oak) (Lab): How many meetings and discussions have taken place between Ministers and officials over the past 12 months about the compilation and presentation of the data?

Priti Patel: I have already said that we will publish the data. [Interruption.] We were the first Government ever to publish such information, which we did back in 2012. This is work in progress: my officials are now working on the publication of the data.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I think the public will be appalled that the Government have adopted the tone that we heard in the Minister’s response today. May I pursue the question put by my hon. Friend the Member for Blaydon (Mr Anderson)? The Minister said that we would have the data by the autumn. Having looked it up, I have established that autumn will begin on 21 September. Can the Minister confirm that she will come to the House during the two weeks following our return in September, make a statement, and hear our responses to it?

Priti Patel: As I have said, the data will be published. Once they have been published, I shall be happy to take questions about them from Labour Members and, indeed, all other Members.

21 July 2015 : Column 1381

Natalie McGarry (Glasgow East) (SNP): Given some of the Minister’s replies today, it is clear that she likes repetition, and now I am going to copy her. Will she please answer the question that has been asked by my hon. Friends, and tell us whether she will appeal against the decision?

Priti Patel: Let me say again, for the record, that we will publish the data—[Interruption]—and that, before the autumn, we will publish all the aspects of those data that we have been asked to publish.

21 July 2015 : Column 1382

Points of Order

1.7 pm

David Rutley (Macclesfield) (Con): On a point of order, Mr. Speaker. Some Members will be aware of the recent tragic events in Bosley, south of Macclesfield, following an explosion at the wood treatment mill site on Friday. Three people are still missing. I am very grateful for the support of the Under-Secretary of State for the Home Department, my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), and we thank the emergency services for all that they have done, and continue to do, in such challenging circumstances.

I should be grateful to you, Mr Speaker, for any advice that you can give about how I could best draw the incident to the attention of the House more widely, and convey to the families and friends of those who have been affected by this tragic incident that the thoughts and prayers of Members are with them at what is a very sad and difficult time.

Mr Speaker: I think that the hon. Gentleman has largely achieved his purpose by what he has said and the way in which he has said it. He has spoken for Members throughout the House who will empathise with him, and who will feel enormous sympathy for the families of those involved in this tragic event. As for the wider issues of help for those who have been affected and questions to be raised about the precise sequence of events, they can be aired subsequently in a variety of forums in the House. The hon. Gentleman is dexterous and innovative in his use of those forums, so I am sure that we shall hear from him further as appropriate. I thank him for what he has said today.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): On a point of order, Mr. Speaker. Yesterday the House completed the process of setting up departmental Select Committees and their equivalents. However, one Committee remains as yet unformed, and even its Chairman has not yet been appointed. That is the Intelligence and Security Committee. How can we ensure that the Government will proceed with some speed to set up a Committee whose members are appointed on the recommendation of the Prime Minister?

Mr Speaker: As the hon. Lady has implied, that particular Committee is in a different category from the others with which the House has dealt. However, her point of order is not a matter for me. It is possible that she would like it to be, but it is not. It is a matter for the usual channels, the most senior representative of which is sitting, statesmanlike, on the Treasury Bench, and will have heard what has been said.

In the interests of the House as a whole, I hope that these matters will be attended to before very long, but, knowing the hon. Lady as I do, I am sure that if they are not, she will return to the charge.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): On a point of order, Mr Speaker. You will have seen that the Home Office has sneaked out a written statement on the last day of term about a short consultation on the funding arrangements for the 43 police forces in England and Wales. There is much concern in areas such as Merseyside—which has already lost 23% of its

21 July 2015 : Column 1383

budget and over 700 police officers—about what this will mean for the years to come. Have you, Mr Speaker, received any indication from the Government that a Minister is intending to come to the House and give an oral statement on this important issue?

Mr Speaker: I have received no such indication. Of course the method by which the Government intend to communicate their message on this subject is a matter for the Government and they have chosen to do so through the device of a written ministerial statement. There will be opportunities for the matter to be raised and probed further, but realistically that will have to wait a period of weeks. I recognise that that will disappoint the hon. Lady, but that is the factual answer to her inquiry.

Bill Presented

Constitutional Convention (No. 2) Bill

Presentation and First Reading (Standing Order No. 57)

Mr Graham Allen, supported by Mr David Davis, Tim Farron, Jon Cruddas, Jeremy Lefroy, Mr Alistair Carmichael, Caroline Lucas, Jeremy Corbyn, Mark Durkan and Zac Goldsmith, presented a Bill to make provision for a convention to consider the constitution of the United Kingdom; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 11 September, and to be printed (Bill 61).

21 July 2015 : Column 1384

Public Nuisance from Wind Farms (Mandatory Liability Cover) Bill

Motion for leave to bring in a Bill (Standing Order No. 23)

1.10 pm

Mr David Davis (Haltemprice and Howden) (Con): I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to make provision about obligations on wind farm operators in respect of financial cover for potential liabilities arising from cause of public nuisance; and for connected purposes.

Wind farms are contentious. Some argue passionately that they are a great public good and the solution to global warming while others equally passionately believe they are a waste of money. This Bill takes no side in that debate. It is narrowly defined to one aspect of public interest: it requires the operators of wind farms, who are in receipt of £797 million of public subsidy a year, to organise their affairs so that they are able to meet the costs of any nuisance imposed on people living near them.

In 1995 the World Health Organisation recommended that to prevent sleep interruption low frequency noise should not exceed 30 decibels. However, in 1996 the Government’s Energy Technology Support Unit—ETSU—set the noise limit for wind turbines at 43 decibels. That is an enormous difference; on the logarithmic decibel scale it is approximately double the WHO limit. We still use those standards today.

In the last five years no planning application was refused on noise-related grounds, but there have been 600 noise-related incidents arising from wind farm operations. The majority of complaints arise as a result of amplitude modulation, which is the loud, continuous thumping or swishing noise regularly described by those living near wind farms.

Numerous studies have identified that sleep is disturbed on a regular basis even at distances over 1 km away from turbines, yet under the ETSU standards turbines can be installed just 600 metres away from residential property. The wind farm companies are acutely aware of this, and all the more so since a member of the public, Jane Davis, sued a wind farm near her home for noise nuisance. The matter was settled out of court, and there is a gagging order preventing us from knowing the details, but the settlement is rumoured to have been in the region of £2 million.

Since this case, some dubious measures have been taken by the industry to obstruct perfectly legitimate claims for nuisance. The use of shell companies in the wind industry seems to be the commonest trick. The parent company provides a loan to a specially created subsidiary to set up the wind farm, then leaves it in control of operations. The subsidiary’s balance sheet typically comprises the wind farm physical assets, but they are more than offset by a very large loan from the parent company, with a resulting net liability. Profits from energy generation and large amounts of public subsidy are siphoned off to the parent company. The subsidiary is left as a financial shell, with very few liquid assets and total liabilities greater than total assets. That makes it impossible to bring litigation against a wind farm, simply because there is nothing to win from them. As such companies have negative net assets, even liquidating them would generate no cash to pay either damages or a legal bill.

21 July 2015 : Column 1385

One of my constituents bought his house in my constituency to enjoy a quiet retirement with his wife. After living there for more than a decade a 10-turbine wind farm was built near the house. The closest windmill is just over 600 metres from his home. He was assured at the planning stage that the wind farm would not trouble him, yet he has suffered the misery of regular noise and turbine blade flicker which has rendered his home almost unliveable. The low frequency noise from the turbines easily penetrates the double glazing. The couple have had to change bedrooms in order to sleep, but even so the persistent noise from the wind farm has taken its toll on his wife’s health; she now suffers heart palpitations and is prescribed anti-depressants on a permanent basis by her doctor.

My constituent, fearing his retirement has been ruined and his home thoroughly devalued, attempted to use his legal insurance to claim for nuisance from the wind farm operators. While there was a good chance of success in court, the company’s finances were organised so that there was no realistic prospect of recovering either damages or the legal costs of bringing the case. That being so, his insurers would, quite understandably, not cover his legal costs. That is despite the fact that the eventual owner of the wind farm is AES, a multibillion dollar international company involved partly in renewables but largely in coal and gas, that paid its chief executive $8.4 million last year. It laughably claims in its annual report to be a “World’s Most Ethical Company”.

It is not alone in its hypocrisy. In March I raised this disreputable practice with Falck Renewables, prospective operators of a wind farm near my own village in my constituency. I asked it whether it was going to do the same. It did not reply.

My constituents have no way to recover the tranquillity of the lives that they thought they were going to enjoy when they first moved to rural Yorkshire. They can neither sell their house nor get any financial recompense to enable them to afford to move, so they are trapped in this misery.

My point is a simple one. My constituents are just individual representatives of a situation that is repeated up and down the country. Wind farm companies must

21 July 2015 : Column 1386

be adequately capitalised so that there can be a reasonable prospect of financial success for prospective litigants whose way of life they have damaged. It is not only the noise that is a nuisance, of course. When the sun is low in the sky behind a turbine it creates a “strobe effect” which can be harmful to health and wellbeing, and there are also now concerns that some wind farms could be abandoned at the end of their operational lifespan, creating another sort of visual blight, this time in perpetuity.

The simple solution that I propose in this Bill is to require wind farm-operating companies to hold enough cash in hand to manage a legal case at any time, and in addition a financial bond—a guarantee, or insurance policy—as a security against potential liabilities, including all public nuisance and final decommissioning costs. Any wind farm that fails to do that should lose its right to subsidy—which, as I said, amounted to £797 million in one year for the industry. This would ensure that citizens could reasonably sue when they suffer damage, but, just as importantly, it would be a strong incentive for the companies to operate wind farms in such a way as to avoid public nuisance, which is causing great distress in some cases, and would mean that when the turbines are decommissioned there is money or insurance to cover the cost of clearing the wind farm, avoiding a situation whereby the local council has to pick up the bill.

Whatever our stance on onshore wind, companies in receipt of public subsidy should be required to meet their public responsibilities. This measure seeks to ensure that the big wind farm companies can truly be held liable when they are at fault and gives families the protection they deserve.

Question put and agreed to.


That Mr David Davis, supported by Chris Heaton-Harris, Tom Pursglove, John Mann and Jim Shannon, present the Bill

Mr David Davis accordingly presented the Bill

Bill read the First time; to be read a Second time on Friday 11 September, and to be presented (Bill 62).

21 July 2015 : Column 1387

Finance Bill

Second Reading

Mr Speaker: I must inform the House that I have selected the amendment in the name of Mr Angus Robertson, on behalf of the Scottish National party.

1.20 pm

The Financial Secretary to the Treasury (Mr David Gauke): I beg to move, That the Bill be now read a Second time.

As my right hon. Friend the Chancellor set out in the recent Budget, the British economy is fundamentally stronger than it was five years ago. The deficit has been halved as a percentage of GDP; for the first time since 2001-02 debt as a share of GDP is falling; the UK was the fastest growing economy in the G7 in 2014, and we are expected to repeat that in 2015, too. We have more individuals in work than ever before, and wages continue to rise above inflation.

Having come so far, we need to stick to our long-term plan for economic recovery. The first Finance Bill of this Parliament demonstrates this Government’s commitment to continuing the plan to build a productive, balanced and secure economy, which delivers for working people at every stage of their lives.

I shall happily take interventions this afternoon, but let me first set out to hon. Members the order in which I intend to discuss the measures in the Bill. I shall begin by talking about those measures that are intended to support working people through the tax system. Next, I shall set out how the Bill will help put the public finances in order by tackling tax avoidance, evasion, non-compliance and imbalances in the tax system. Finally, I shall talk about how the summer Finance Bill 2015 will take the first steps in implementing measures to improve the UK’s productivity.

I shall begin with those measures designed to help hard-working people keep more of the money they earn, a principle to which this Government are committed. We have a proud record on reducing tax for the lowest paid. As a result of action taken in the previous Parliament, 27.5 million individuals saw their typical income tax bill reduced by £825. This Finance Bill makes even further progress, by increasing the tax-free personal allowance to £11,000 in 2016-17 and to £11,200 in 2017-18. As a result of those changes, a typical basic rate taxpayer will be £80 better off in 2016-17 compared with in this tax year. Further, the higher rate threshold will also increase from £42,385 in 2015-16 to £43,000 in 2016-17—£300 more than the amount announced in the March Budget. That will take 130,000 individuals out of the higher rate of tax by 2016-17.

It is the firm belief of this Government that individuals working 30 hours a week on the national minimum wage should not pay income tax. That is why this Finance Bill will enshrine that link in law for future increases in the personal allowance. Once the personal allowance has reached £12,500, it will always be at least the equivalent of 30 hours a week on the national minimum wage. Until that point, my right hon. Friend the Chancellor will have a legal duty, when setting the personal allowance, to consider the financial impact on an individual working 30 hours on the national minimum wage. This Finance Bill also delivers another legislative

21 July 2015 : Column 1388

commitment to low levels of taxation. It introduces aspects of the five-year tax lock by ruling out increases in income tax and VAT for the duration of this Parliament.

Finally, this Government know that the wish to pass something on to one’s children is the most basic human aspiration. To give hard-working people the security of knowing that they can continue to provide for their families after they have gone, this Bill phases in a new £175,000 per person transferable allowance when a person’s home is passed on at death to their direct descendants. This means that by the end of this Parliament, the effective inheritance tax threshold for married couples and civil partners will be £1 million.

At the same time, to ensure that those with the broadest shoulders continue to bear the biggest burden, this new allowance will be gradually withdrawn for individuals with assets of more than £2 million. This reform will be paid for by cutting down on the £34 billion that the Government spent on pensions tax relief in 2013-14 —two thirds of which goes to higher and additional rate taxpayers. The benefits of pensions tax relief for top earners will be restricted by tapering away the annual allowance for those with a total income of over £150,000 from April 2016.

These are important measures, rewarding and supporting the efforts and aspirations of working Britain—and doing so in a fair and balanced way.

Richard Fuller (Bedford) (Con): In the previous Parliament, under the previous Government, one outcome was that the wealthiest in the country paid a higher proportion of tax than they did under the preceding Government. Do this Government intend that to continue to be the case in this Parliament?

Mr Gauke: I can confirm to my hon. Friend that that will continue to be the case. We have set out a Budget that is balanced, ensuring that those with the broadest shoulders continue to bear the greatest burden.

I now turn to the way in which the summer Finance Bill 2015 will help to fix the public finances. We know that the UK’s economic recovery is well established, with growth at 3% in 2014, and continued robust growth for 2015 and 2016, according to the Office for Budget Responsibility’s forecast. But this country needs the economic security of running a surplus, and, if we are to achieve that, a further £37 billion in fiscal consolidation is required over the course of this Parliament. To deliver that, the summer Budget included measures to tackle tax avoidance and tax planning, evasion and compliance and imbalances in the tax system, which will collectively raise £5 billion a year by 2019-20.

This Finance Bill implements a number of those measures. First, it includes provisions preventing private equity and some hedge fund managers from exploiting tax loopholes to avoid paying the full rate of capital gains tax. Secondly, it removes the ability for companies to use UK losses and reliefs against their controlled foreign company charge. That will improve the effectiveness of the UK CFC regime in countering aggressive tax planning by multinational companies. Thirdly, the Bill legislates to stop a potentially significant tax planning risk, whereby corporate groups exploit tax rules for asset transfers between related parties. This puts it beyond doubt that the tax rules cannot be manipulated to prevent profits from being charged to tax.

21 July 2015 : Column 1389

Patrick Grady (Glasgow North) (SNP): The International Monetary Fund recently said that developing countries lose £212 billion a year through corporate tax avoidance by multinational companies. Transparency will be absolutely crucial in dealing with that, but the Bill makes no mention of public country-by-country reporting. Will the Government look carefully at that, and at any amendments that might come forward, given that it would enable people in the developing world to see the taxes that companies pay locally for their benefit?

Mr Gauke: The UK has been instrumental in bringing in country-by-country reporting to tax authorities as part of the OECD’s base erosion and profit shifting project, which will be of great assistance to tax authorities. We want to ensure that developing countries can benefit from that co-operation between tax authorities and from greater use of data. The publication of country-by-country reporting is best approached multilaterally.

But we should all acknowledge the progress that has been made. For example, much more information is now available to tax authorities, enabling them to assess large companies’ tax strategies. One proposal in the Budget earlier this month was to make UK-based multinational companies publish their tax strategies. Such information would help to incentivise behaviour away from aggressive tax avoidance, which Members in all parts of the House wish to address.

Sammy Wilson (East Antrim) (DUP): Does the Minister accept that the target of £5 billion is really small beer when one considers the amount of tax that many multinational companies, including those that operate here in the UK, avoid paying by moving their profits around?

Mr Gauke: No, I do not accept that. Indeed, if one looks at Her Majesty’s Revenue and Customs’ tax gap publication, which identifies where the tax gap falls, one sees that, in terms of avoidance and acting contrary to the intention of Parliament, we should not overstate the element that is corporation tax avoidance by large multinationals. It is important that we address it, but one should not believe that it amounts to a huge pot. We have taken a number of steps in this area, some of which are operational. For example, we have supported HMRC to expand its large business service. Again, further progress on that was announced in the Budget. We have introduced the diverted profits tax, which came into force earlier this year. That is a very significant measure to address aggressive tax avoidance. We want to take further steps. Indeed, the base erosion and profit shifting project, which the OECD is running, means that we can hopefully take further steps in future. But those areas are best dealt with on a multilateral basis, and the UK has been very engaged in ensuring that there is progress in that area. I hope that there will be further progress on that front later this year.