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Mrs May: My hon. Friend expresses concerns that I know have been expressed not only by Government Members in this House, but elsewhere, by members of the public. That is why it is so important that the Government have taken up the work being done to reform the European Court of Human Rights, particularly on its efficiency, but also on the issue of subsidiarity. Indeed, as I say, it is what my right hon. and learned Friends are pursuing, as we speak, at the Brighton conference.
Kris Hopkins (Keighley) (Con): I suggest to the Home Secretary that, after many, many years, we can take comfort from the fact that the Labour party has finally recognised the seriousness of the need to kick this terrorist out of the country. Does she agree that if Labour had applied the same urgency and enthusiasm when in government, this country would be a safer place today?
Dr Thérèse Coffey (Suffolk Coastal) (Con): Does my right hon. Friend agree that Abu Qatada’s lawyers have made this reference to the European Court only after hearing the exceptionally strong Government case showing that he has a very weak case against deportation? Does she agree that instead of hurling cheap shots, those in this House should be united in their determination that Abu Qatada should be deported from this country as quickly as possible?
Mrs May: My hon. Friend makes an important point. This House should indeed be united in its determination to see Abu Qatada deported. I hope that it will also be united in welcoming the work that has been done by this Government to achieve the assurances that mean that we have got such a strong case for deporting him.
Robert Halfon (Harlow) (Con): Does my right hon. Friend agree that a major flaw in the European Court is that a significant number of the judges come from countries with very questionable human rights records? Does she also agree that it is time for the European Court not to be a charter for criminals, but to be a convention for human rights?
Mrs May: The role of the Court is obviously in upholding the European convention on human rights. It is important that we seek to ensure that the cases that the Court is taking are indeed appropriate to be heard by that Court, and of course that is part of the work that my right hon. and learned Friends are undertaking.
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Business of the House
Tuesday 24 April— If necessary, consideration of Lords amendments, followed by a motion relating to section 5 of the European Communities (Amendment) Act 1993, followed by a motion on an EU directive on data protection in the areas of police and criminal justice, followed by a general debate on the national planning policy framework.
Monday 30 April—Consideration of an allocation of time motion, followed by all stages of the Sunday Trading (London Olympic Games and Paralympic Games) Bill [Lords], followed by, if necessary, consideration of Lords amendments.
Ms Eagle: I not only thank the Leader of the House for his statement and congratulate the new Serjeant at Arms on his appointment, but pay tribute to the former Leader of the House, Tony Newton, who has sadly died.
Four weeks ago, the Chancellor made one of his rare appearances at the Dispatch Box to present his Budget, and it has gone down so brilliantly that the Leader of the House is going to find it even more difficult to coax the Chancellor out of hiding and back to the Dispatch Box any time soon. It takes a unique combination of political skills, which only this Chancellor possesses, to unite pie and pasty makers, Church and charity leaders, philanthropists, university vice-chancellors and caravan owners. The Chancellor’s magic touch has now extended to his own Back Benches, because last night nearly 10% of the Conservative parliamentary party voted against their own Government on the Budget.
It is not just the Budget that this Chancellor has bungled. He has made the wrong choices on the economy and the Government have no strategy for growth. While ordinary families are being hammered by soaring fuel, food and housing costs, this part-time Chancellor has chosen to give a huge tax cut to the richest 1%.
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“reviewing what it can do to encourage philanthropy across the board”.
You have to say, Mr Speaker, that they have come up with a very novel way of doing it. The Culture Secretary briefed that the Budget process was such a shambles that the Chancellor did not bother speaking to him about the charities tax, and presumably he did not know about the churches tax either. Will the Culture Secretary come to this House and make a statement on that debacle?
Following on from the shambolic Budget, yesterday the Government forced through a tax cut for the richest 1%. Last November, the right hon. Member for Sheffield, Hallam (Mr Clegg), the Liberal Democrat leader, said:
“It would be utterly incomprehensible for millions of people who work hard...if suddenly the priority is to give 300,000 people at the very, very top a tax break”.
If it was utterly incomprehensible then, why have Liberal Democrats voted for it now? Will the Leader of the House coax the Deputy Prime Minister to the Dispatch Box to explain his damascene conversion to the interests of the top 1%?
Do the Liberal Democrats seriously think they can get away with agreeing a policy round the Cabinet table, denouncing it in the media, and then voting for it in the House? It is not just on the Budget that they have tried that trick. As the Prime Minister pointed out while on his most recent world tour, the Liberal Democrat leader secretly signed off the policy on internet surveillance in Government and then, when details appeared in the papers, he publically denounced it. A pattern is emerging. Judging by his track record, the Deputy Prime Minster will now ensure that Liberal Democrats vote for the measure while he blames the Tories for it.
Perhaps the Liberal Democrat leader could explain this leaflet, which the party has just put out in Cornwall. It states “Stop the Tories Taxing Our Pasties!” Just five Liberal Democrat MPs voted for Labour’s amendment, and analysis of last night’s result reveals that it was Liberal Democrat votes what won the pasty tax for the Government. May we have a statement on this desperate effort to hoodwink the public? People are not fooled by the Liberal Democrats’ dubious political posturing. The pasty tax, the caravan tax and the churches tax were all voted through the House last night because of Liberal Democrat support.
The part-time Chancellor’s shambolic handling of the Budget is matched by the Home Secretary’s increasingly chaotic attempts to deport Abu Qatada. On the interpretation of time limits, I have to ask, why did no one in the Home Office think to phone up the European Court to check when it thought that the deadline was at an end?
This parliamentary Session is finally staggering to a close, ending a spectacularly mismanaged legislative programme with a spectacularly mismanaged Budget, and we have already started to have leaks about the content of the next Queen’s Speech. The entire Budget was leaked, but the content of the Queen’s Speech should not be briefed to the media before Her Majesty has delivered it.
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In his statement, the Leader of the House referred to all the time he has allowed for consideration of Lords amendments next week, but will he take this opportunity to deny rumours that the House will rise much earlier than he is planning?
In an interview this week, the chair of the Conservative party tried to explain away what she herself described as the Government’s “incoherence” with two words “Liberal Democrats”. Can the Leader of the House tell us what on earth she could have meant?
Sir George Young: I begin by thanking the hon. Lady for her kind words about Tony Newton, whose funeral I attended last week, where I listened to some generous tributes from John Major and John MacGregor. It was a very well attended and moving funeral.
Let me move on to the hon. Lady’s questions. Most of them related to the Budget; I gently point out to her that we are debating the Budget for the whole of this week and that this time is for questions about next week’s business. All the issues she raised have been the subject of a debate this week or will be the subject of a debate later today. Let me also gently remind the hon. Lady about Budget rebellions. Three weeks ago, an amendment was tabled to the Budget opposing the cut to the 50p tax rate. In other words, it was an amendment that would have implemented the Labour party’s policy. When there was a vote, only two Labour Members voted for it: the hon. Members for Bolsover (Mr Skinner) and for Newport West (Paul Flynn). They were the only two Members who supported the official Labour party policy. Everyone else, including the hon. Lady, rebelled, so I will take no lectures from her on rebellions on Budget measures.
The hon. Lady raised some points about taxation. She did not mention the 2 million people we are taking out of tax or the 24 million taxpayers who will benefit from the changes we have made. As she knows, the better-off will pay five times more in extra tax than they will get from the reduction in the rate from 50p to 45p.
On the legislative Session, I gently remind the hon. Lady that, unlike during the previous Session under the previous Government, we have not rushed through Bills with guillotine after guillotine. We have consistently allowed two days on Report for several Bills, many programme motions have been supported by the Labour party—all credit to Labour for coming to a sensible accommodation—and we have had adequate discussion. I remember the hon. Lady saying that we would not get all the Bills through, but we are getting them all through, with adequate time.
On the hon. Lady’s final question, I have announced that the House will be sitting the week after next and I have announced the business for the Monday. She will understand that at this stage in the parliamentary Session, with four Bills still in play between the two Houses, it is impossible to forecast exactly when the House will prorogue. I anticipate that it will be some time the week after next.
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programming motions can go? That would offer the opportunity of taking control of business away from the Executive and back to Parliament.
Sir George Young: As my hon. Friend will know, the Backbench Business Committee has been established and elections will take place at the beginning of the next Session. He will know of the commitment in the coalition agreement to introduce a committee to deal with Government business by the third year, which ends in about a year’s time and so, as my hon. Friend will understand, we have 12 months to honour that commitment. I plan to honour it.
Natascha Engel (North East Derbyshire) (Lab): On Tuesday, the Backbench Business Committee met for the last time this Session—[Hon. Members: “Aah!”] I see the grief on the Chief Whip’s face. As the Leader of the House announced, Thursday is the last debate this Session from the Backbench Business Committee in Westminster Hall, where we will be launching our end-of-term report with a mini-statement, in which I hope all Members will participate. Will the Leader of the House ensure that all political parties elect new members to the Backbench Business Committee as a matter of urgency when we return to Parliament on 9 May? Until that Committee is reconstituted no further debates can be scheduled, so I encourage the Leader of the House to encourage all political parties, especially his own, to ensure that members are elected as quickly as possible.
Sir George Young: I take this opportunity to compliment the hon. Lady on her chairmanship of the Backbench Business Committee during its first two years. As she has just said, it has met for the last time. I have no idea whether she is going to stand again as Chair and the last thing she would want would be any endorsement from business managers of her candidacy, but I hope that if she stands, the House will take on board her record of leadership over the past two years.
Speaking for the two coalition parties, I can say that we plan to proceed as quickly as possible at the beginning of the next Session with the election of our members of the Backbench Business Committee, and I am sure that the shadow Leader of the House will ensure that her party does the same. The Government want to see the Committee up and running as soon as possible and we will do all we can to facilitate it. I commend the hon. Lady on her public service announcement about the launch of her report in Westminster Hall next week and I very much hope to be in my place for that.
Roger Williams (Brecon and Radnorshire) (LD): The people of Hay-on-Wye in my constituency are twinned with the people of Timbuktu in Mali, where they carry on many good projects involving health, education and agriculture. They are now concerned about the well-being of their friends in that trouble-torn country. Will the Leader of the House either make time available for a debate or ask the Foreign Secretary to come to the House and make an oral statement so that we can ascertain what is happening in that country and to our embassy there?
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Sir George Young: I understand my hon. Friend’s concern, particularly because of the links between his constituency and Timbuktu. We had an opportunity on Tuesday in Foreign and Commonwealth Office questions for those concerns to be ventilated, but I will ask the Foreign Secretary to write to my hon. Friend and give him up-to-date information, particularly about any impact on British citizens in that country.
Dame Joan Ruddock (Lewisham, Deptford) (Lab): The whole House will be aware of the courage and commitment to democracy of the Burmese opposition leader Aung San Suu Kyi. Is the Leader of the House able to make a statement about her visit to the UK? Perhaps he might agree with me that an invitation to address both Houses of Parliament in Westminster Hall would be a fitting tribute to her and a very great honour to us all.
Sir George Young: I am grateful for the right hon. Lady’s comments. As she knows, the Prime Minister extended to Aung San Suu Kyi an invitation to visit this country and I have seen reports, which I welcome if they are true, that she plans to spend some time in Oxford where she used to live. I suspect that the question of an address in Westminster Hall is above my pay grade, but I will ensure that it goes to the relevant authorities for serious consideration in view of her record on human rights.
Mr Stewart Jackson (Peterborough) (Con): It is more than 20 years since the landmark Medical Research Council study that showed that the fortification of foodstuffs with folic acid taken prior to conception would reduce neural tube defects such as spina bifida and hydrocephalus. Many countries have pursued that policy, but there is an impasse in our country between the Scientific Advisory Committee on Nutrition, the Food Standards Agency and the Department of Health. May we have a debate in Government time to ensure that we properly debate this matter and follow the lead of other countries to reduce the incidence of these dreadful medical conditions?
Sir George Young: I applaud my hon. Friend’s concern on this subject and his campaign and zeal for progress. I cannot promise a debate, but it sounds like an appropriate subject for a debate in Westminster Hall or on the Adjournment of the House. In the meantime, however, I will ask my right hon. Friend the Secretary of State for Health to bring my hon. Friend up to date with the progress he is making on resolving the conflict of interest to which my hon. Friend has referred.
Ann Clwyd (Cynon Valley) (Lab): I should like to join in the tribute to Tony Newton. He fought for what he believed, right up to the week of his death, and I would like to give my commiserations to his family.
What is the Foreign and Commonwealth Office’s present travel advice to people thinking of going to the Formula 1 race in Bahrain, given that Amnesty International this week published a report saying that nothing much has changed in Bahrain over the past year? This morning, the BBC’s sports reporter made it quite clear that there is a lot of unrest in Bahrain and there is a man on hunger strike at the moment—on the
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70th day of that hunger strike. What is the Government’s advice to people thinking of going to the Formula 1 race?
Sir George Young: My understanding is that the Foreign Office has given no specific advice that people should not travel to Bahrain. The Formula 1 event is a matter for the Bahraini authorities and the FIA organisers. Although we are concerned by some of the violent exchanges still occurring in Bahrain and we call on all sides to exercise restraint and follow the rule of law, at this stage the Foreign Office is not giving any specific advice to potential visitors that they should cancel their visit.
Jason McCartney (Colne Valley) (Con): I had a wonderfully positive Easter recess in which I opened a new dye works—the first to open in the UK for 20 years —presented a cheque for £45,000 of Olympic legacy cash from the national lottery to a local rugby club and also met an engineering works that is expanding so fast that it needs new premises. With all that positivity around, may I suggest that my right hon. Friend should suggest to the Chancellor that we slap a tax on doom-mongers and mitherers?
Sir George Young: My right hon. Friend the Chancellor might be looking for new ways of broadening the tax base but whether that one would be easy to implement I very much doubt. My hon. Friend makes a good point. When the House is not sitting, MPs are not on holiday. His hyperactive work during the Easter recess shows just how hard MPs on both sides of the House work during the recesses.
Yvonne Fovargue (Makerfield) (Lab): In light of the Commons vote on Tuesday to remove from scope the majority of social welfare law, which will have a major effect on the viability of many advice agencies, will the Leader of the House tell us when the long-awaited advice review will be published so that we might at least have some attempt at a strategic approach instead of just allowing advice deserts to flourish?
Sir George Young: What I will undertake to do, now that the Bill has gone back to another place, is see that when the other place considers the amendments we made an answer is given by the Minister responsible to the hon. Lady’s question about the date of the help she has just mentioned. As she knows, some concessions were made on Tuesday in view of the concern that she and others had expressed and it is now a matter for the other place to see whether they accept our amendments.
Simon Kirby (Brighton, Kemptown) (Con): Should you wish to visit Brighton and park your car on the sea front, Mr Speaker, the Green-run council would charge you £20 to do so. Will the Leader of the House find time for a debate on excessive parking charges?
Sir George Young:
That would be an interesting debate. The Government believe in local democracy, in devolving decisions about parking charges to local authorities and in local electors holding people to account if they take unpopular decisions on parking. My hon. Friend will have seen the Mary Portas review and some of the proposals in that to make it easier for people to park in
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towns or cities such as his, and I can only suggest that he pursue his campaign in Brighton, because I think the key to a change in policy is held there rather than here.
Pete Wishart (Perth and North Perthshire) (SNP): May we have a debate on employment rights at the Olympics? The Musicians Union has learned that the London Organising Committee of the Olympic Games and Paralympic Games is expecting musicians to play for nothing at the summer events. Those who put on the events will be paid, as will those who provide the equipment and the security. I am sure that the Olympic bureaucrats will be handsomely paid, but uniquely musicians will be expected to play for nothing. Does the Leader of the House believe this is totally unacceptable and that musicians should always be offered a fee for their services?
Sir George Young: I understand the strong feelings and I commend the hon. Gentleman on his own performance as a musician. I will raise the issue with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport. I do not know whether there will be an opportunity to raise the matter in the rather narrow debate on Monday week on the Olympics and Sunday trading. Depending on the ingenuity of the hon. Gentleman and the breadth of tolerance of whoever happens to be in the Chair, there might be an opportunity to raise it then, but I shall certainly forewarn my right hon. Friend of the concern the hon. Gentleman has just expressed.
Sarah Newton (Truro and Falmouth) (Con): Returning power to people and communities is a vital coalition reform. Cornwall council wants to make the most of the new opportunities to be the first rural region to have the same powers as our important cities, so that we can improve the quality of life of people in Cornwall. Will my right hon. Friend seek to have the Ministers responsible make a statement to enable that?
Sir George Young: The short answer is yes, of course. We are anxious to devolve power to local communities, including communities in Cornwall, and my right hon. Friend the Secretary of State for Communities and Local Government will want to consider very carefully the case that my hon. Friend makes for ensuring that the people of Cornwall can have the best possible deal and achieve the economic growth that the area needs so much.
Siobhain McDonagh (Mitcham and Morden) (Lab): Three months ago a dossier about war crimes committed by the defence attaché at Sri Lanka’s high commission in London, Major General Prasanna De Silva, was sent to the Foreign Office. However, the Foreign Secretary has reportedly refused to strip him of diplomatic immunity so that he can be questioned about these terrible accusations. I hope we can have a debate about the case and about the abuse of diplomatic immunity, because if the attaché is allowed to leave without being questioned, that will undermine Britain’s proud reputation for not tolerating war criminals. If we are soft on Sri Lanka, other shady regimes will surely also begin to regard us as a refuge for people who commit atrocities.
Sir George Young:
I understand the hon. Lady’s concern. It is important that diplomatic immunity is not abused. There was an opportunity on Tuesday to raise this with the Foreign Secretary. I am not sure that
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it will be possible to raise it again before Prorogation, but I will ask the Foreign Secretary to drop her a line explaining what action he is taking in response to her concern about the continuing diplomatic immunity of the individual to whom she referred.
Mark Pritchard (The Wrekin) (Con): May we have a debate on the European Commission? Will the Leader of the House take this opportunity to end the rumours that the replacement for Baroness Ashton, whose term of office ends in 2014, will not be a Liberal Democrat, but that the next UK Commissioner to the EU Commission will be a Conservative?
Sir George Young: That is way above my pay grade. We have two years in which to come to a decision on this very important matter concerning the UK representative on the Commission. I hope that between now and 2014 my hon. Friend will have an opportunity to ask questions of the Foreign Secretary at Foreign Office questions, where he may get a more authoritative response as to the procedure and consultation process before a replacement for Baroness Ashton is announced.
Nic Dakin (Scunthorpe) (Lab): I understand that the Prime Minister is being uncharacteristically coy about whether he has ever stayed in a static caravan. I hope the Leader of the House will be less coy in answering. Will he ensure that an impact assessment is published on the effect of the caravan tax on sub-regional economies, such as that of Humberside?
Sir George Young: We had a fairly extensive debate on the subject yesterday. I am not sure whether the hon. Gentleman was able to catch the eye of the Deputy Speaker. It is open to him to table a parliamentary question in order to get the answer to the question that he asked—what is the impact on a particular region of the imposition of the tax?
Joseph Johnson (Orpington) (Con): The Prime Minister was in Orpington on Tuesday, making him, I believe, the first serving Prime Minister to visit the constituency in more than 40 years, since the days of Edward Heath. May we have a debate on the historic neglect of the outer London boroughs that this mayoralty and this Government inherited and which this mayoralty and this Government are working so tirelessly to reverse?
Sir George Young: My hon. Friend has, of course, an interest in the outcome of the elections. It is certainly the case that Boris Johnson has given consideration to the outer London boroughs that was denied to them by the previous incumbent. I very much hope that on election day those who share my hon. Friend’s concern that the outer London boroughs should not be neglected at City Hall will turn out in force and vote for Mayor Johnson.
Richard Burden (Birmingham, Northfield) (Lab):
The Leader of the House will be aware that today is the designated international day of remembrance for victims of the holocaust. Some years ago I was asked to be a guardian of the memory of Jacob Billauer, about whom I have been able to find out very little, other than the
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fact that he was a Polish Member of Parliament—a Member of Parliament like us. Does the Leader of the House agree that it is appropriate that our House should spend a moment to remember the victims of the holocaust and to record the name of Jacob Billauer in
so that it can be remembered in history in this place as well?
Sir George Young: I am very grateful to the hon. Gentleman for reminding us about this day of remembrance for victims of the holocaust and for reminding us of Jacob Billauer and all the other victims. He will know that this House had a debate on Holocaust memorial day on 19 January, a very moving debate, part of which I attended, and which was organised by the Backbench Business Committee, and many Members on both sides of the House will have signed the book in the House to commemorate those who lost their lives. The debate that we held this year and in previous years highlighted the importance that the House places on ensuring that the victims of the holocaust are never forgotten.
Mr John Leech (Manchester, Withington) (LD): During Transport questions the Secretary of State confirmed that the Department has no idea of the cost of increasing the motorway speed limit and its impact on road casualties. Given that the Opposition have already come out in favour of a policy that will cost millions and cost lives, may we have a debate in the House on the financial implications and the cost in human life of an increase in the speed limit?
Sir George Young: This is a matter which I, as a former Secretary of State for Transport, have looked at and have some interest in. Again, it strikes me that that would be an appropriate subject for a debate in Westminster Hall, where we could give it the consideration that it deserves. If such a debate were to take place, I would do my best to ensure that the statistics that my hon. Friend has asked for—the cost in extra consumption and, if it is indeed the case, the cost in accidents and lives—are available so that that can help to inform the debate before a final decision is taken as to whether the speed limit should be raised on motorways.
Valerie Vaz (Walsall South) (Lab): May we have an urgent debate on staffing levels in Government Departments, particularly Her Majesty’s Revenue and Customs and the Department for Communities and Local Government? My constituent, Mrs Dhillon, received a late penalty notice for her husband, who died in 2008, for 2011. That is mainly a result of the fact that many systems are automated. I have also contacted DCLG about business rate rebates and have not had a reply yet. Could the Leader of the House look into this?
Sir George Young: My view is clear that all Members of the House are entitled to prompt responses to correspondence with Ministers or from officials at HMRC. The hon. Lady has given me the details of the particular correspondence to which she is awaiting a reply, and of course I will chase that up immediately.
James Morris (Halesowen and Rowley Regis) (Con):
Two thirds of people in Halesowen and Rowley Regis have gross earnings of less than £26,000, and most do not believe it to be fair that some families can receive
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much more than this from benefits. May we have a debate in Government time on what further work the Government need to do to make sure that people are always better off in work?
Sir George Young: The motivation behind the introduction of the universal credit, which I hope is supported by Members on both sides of the House, is to ensure that it always pays to work. My hon. Friend will know that the relevant legislation has gone through, along with a benefits cap and a serious approach to benefit fraud. The current system costs the taxpayer £1.5 billion a year. We hope to make progress on that and introduce new measures to tackle fraud, tougher rules and a benefit ban of three years for people who offend repeatedly. The Welfare Reform Act 2012 is an Act of historic importance. We have taken bold action both to make work pay and to protect the vulnerable.
Mr David Hanson (Delyn) (Lab): Before the end of the Session, may we revisit the changes to the feed-in tariff regime, given the astonishing figures produced today by the Government which show that solar panel installation has fallen by more than 90% since the Government’s changes were made, damaging industries such as Kingspan in my constituency, installers and ultimately consumers, and not making this Government the greenest Government in history, as they claim?
Sir George Young: I understand the right hon. Gentleman’s concern. I would be misleading him if I said I could find time for a debate, but after Prorogation and when we have a debate on the Queen’s Speech, depending on what is in it, he might be able to draw to the attention of Ministers the concern that he has just expressed.
Karen Bradley (Staffordshire Moorlands) (Con): Over the Easter recess I spent a morning at our local job club, run by Staffordshire Moorlands community voluntary services. They are having enormous success in getting some of the hardest to place people back into work, including on the Work programme. Could the Leader of the House find time for a debate on the role of the voluntary sector in the Government’s Work programme and in finding work for difficult to place people?
Sir George Young: I commend my hon. Friend on her activity during the Easter recess, and I commend the work that voluntary organisations are doing in delivering the Work programme, which has been calibrated to encourage them to help find work for people for whom it has historically been difficult to find work. I commend the work that is taking place in her constituency. The Work programme is the biggest back-to-work programme that the country has ever seen. It has already helped 300,000 people. We hope it will help more than 3 million people. I cannot promise a debate in the very near future, but there may be opportunities to develop this dialogue in the new Session.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op):
May I remind the Leader of the House that one of the consequences—it may be an unintended consequence—of Government changes to benefits for families is that many children from the poorest families will lose their
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free school meals? That is a very important and terrible challenge for the House. Will he make sure that we have an early opportunity to debate this dramatic change?
Sir George Young: I understand the hon. Gentleman’s concern, which has been in the news today. He will know that we are moving from an array of different benefits to a universal credit—a move that I hope hon. Members on both sides of the House will welcome—under which everyone will be better off in work. There is a particular issue, to which he has just referred, as we migrate from where we are to universal credit, about what happens to entitlement to free school meals. He may have heard the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), speaking about this. We are determined to protect vulnerable children—those children on low incomes. We recognise that free school meals are an important ingredient for them and we are in consultation to ensure that, as we move to the new regime, we continue to protect those in most need.
Andrew Stephenson (Pendle) (Con): In March, Conservative-led Pendle council purchased Brierfield Mills, a landmark grade II listed building, thanks to a £1.5 million grant from the Homes and Communities Agency. Under the previous Government, the building had been bought by Islamic Help, which controversially planned to turn it into a 5,000-place Islamic girls school. Thankfully, now, the site will remain in economic or commercial use. May we have a debate about what the Government are doing to support the economy in the north of England and such economic regeneration?
Sir George Young: I was interested to hear of the project referred to by my hon. Friend, and we are anxious to promote regeneration in his constituency. The regional growth fund is on schedule. The first two rounds allocated £1.4 billion, but a new bidding round has opened recently and an additional £1 billion is now available. I hope that projects in his constituency will consider applying for this so that we can regenerate, provide employment and create wealth.
Kevin Brennan (Cardiff West) (Lab): As a former charities Minister, I am disappointed that we have not heard much from the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd) about the Government’s position on philanthropy, so may we have a statement from him to give him a chance to stop the traducing of the Chancellor’s reputation on philanthropy, because he has been described as anti-philanthropy despite being the man who has brought us the Budget that just keeps on giving?
Sir George Young: The coalition Government are in favour of philanthropy and we have taken a number of steps to promote it. We have made changes to the inheritance tax regime, we have proposals for small donations so that tax can be claimed back, and we are streamlining the mechanism by which charities reclaim tax.
On the specific measure to which the hon. Gentleman refers, he will know that we are having discussions with the charitable sector to seek to protect it from any damaging changes in the proposals that have been announced, which come into effect in a year’s time.
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There is a serious issue as to whether those on high incomes, who have philanthropic objectives, should be able to exempt themselves from income tax by making substantial donations. In America, which has a good culture, there is a cap on relief, so there is nothing inherently anti-philanthropic in ensuring that those who have high incomes make some contribution to the overheads of the country through income tax.
Mr Edward Timpson (Crewe and Nantwich) (Con): In Crewe, a local action group led by Glenn Perris has campaigned successfully, with my support, against the imposition of a council Traveller site, assisted by the new Government policy of working with the private sector to meet any unmet Traveller need. Can we find time for a debate on this important common-sense policy and congratulate Mr Perris and his team on their sterling work?
Sir George Young: I endorse what my hon. Friend says about what is happening in his constituency. He will know that on 23 March we introduced a new light-touch policy on sites for Travellers, and I hope that that will be developed in his constituency in consultation with local communities. Resources are available from Government. There is £60 million of Traveller pitch funding through the Homes and Communities Agency, and Traveller pitches attract the new homes bonus. I hope that the new short light-touch and fair policy puts the provision of sites back in the hands of local people, and that they will find the right balance between the needs of Travellers on the one hand and the interests of local communities on the other.
Mr Tom Harris (Glasgow South) (Lab): Despite the dismal weather of the past week, large parts of England face drought conditions. Meanwhile, in Glasgow we know that it is summer only because the rain warms up. Does the Leader of the House see any value in discussing in a debate on the Floor of the House the costs and practicalities of a nationwide water distribution network so that we in Scotland could perhaps share some of our excess water wealth with our more parched southern compatriots?
Sir George Young: The Glasgow tourist board may be in touch with the hon. Gentleman about his rather disparaging remarks about the weather in that great city. There is an issue about drought, however. We have had one drought summit and there will be another in May. There is a drought group in the relevant Department, and we are taking steps to conserve water, and, where feasible, to move water from those areas in surplus to those in shortage. I cannot promise a debate between now and Prorogation, but perhaps in the new Session, depending on what happens to the weather in between, we may have an opportunity to revisit this.
Ian Swales (Redcar) (LD): The day after the first tonne of steel was made at Redcar’s reopened steel works, I am sure the Leader of the House will join me in congratulating operators SSI. Will he find time for a debate on the vital issue of energy costs for our energy-intensive industries, such as steel?
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Sir George Young: My hon. Friend raises an important issue. The Chancellor has recognised that our climate change proposals have a particular impact on high-energy users, such as steel, and I share my hon. Friend’s delight at the reopening of the plant in his constituency. I do not know if there will be an opportunity as the Finance Bill goes through the House to raise this, but I will share his concern with the Chancellor and inquire about the progress being made in the discussions between the high-energy users and the Treasury, to make sure that the undesirable consequences are mitigated and the industries remain competitive with our European colleagues.
Julie Hilling (Bolton West) (Lab): May we have a debate on the lessons of our industrial heritage, and will the Leader of the House join me in congratulating the people of Westhoughton, who this weekend will be commemorating the 200th anniversary of the burning of Westhoughton mill by the Luddites, an act committed because of the unemployment and poverty that existed at the time? The commemorations will include the burning of a replica mill.
Sir George Young: I hope that the local fire brigade is aware of the rather unique way that the hon. Lady’s constituents have of celebrating these events. I share her commitment to industrial heritage and I hope the ceremony goes well. I will share with the appropriate Minister the concern that she has just expressed.
Gavin Barwell (Croydon Central) (Con): New academies, such as Harris, South Norwood, Oasis Shirley Park and Quest, serving Croydon Central have significantly driven up standards. May we have a debate on the Government’s academies programme, which built on the ideas of Tony Blair and Lord Adonis, which were so shamefully stymied by the shadow Chancellor, but are doing so much to drive up standards for all of our young people, but particularly those from deprived areas?
Sir George Young: I would welcome such a debate on the way that we have driven forward at high speed the policy that we inherited from Lord Adonis. We are clear that academies are helping to increase school standards, and this year’s academy GCSE results improved by nearly twice the level seen across all maintained schools. I hope that we can maintain the momentum and that in the new Session there might be an opportunity for a further debate on our education policies.
Karl Turner (Kingston upon Hull East) (Lab): Yesterday evening, as you know, Madam Deputy Speaker, the Government narrowly staved off a defeat on the imposition of VAT on static caravans. Despite the fact that 17 Tory MPs rebelled against their own Government, that was made possible by Liberal Democrats. May we have a debate on the genuine dislike of Liberal Democrats that is shared across the House and the country?
Sir George Young: No. Those of us who have been in government before, particularly under John Major, would regard a majority of, I think, 25 as a healthy one, compared with that of ’92 to ’97. The degree of harmony between the Conservatives and the Liberal Democrats in the Government is far greater than it was between the Brownites and the Blairites in the last Labour Government.
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Mr Matthew Offord (Hendon) (Con): Given the increasing number of people in this country who have been diagnosed with wet age-related macular degeneration, will a Minister come to the Dispatch Box and advise us why the National Institute for Health and Clinical Excellence refused to license the use of Avastin when it has been proved to be much cheaper than the use of Lucentis?
Sir George Young: The Macular Disease Society is based in my constituency in Andover, and I have very close links with it. The short answer to my hon. Friend’s question is that the manufacturer of Avastin, Roche, has not applied to the relevant authority for a licence to treat wet AMD with this particular product. It is up to it to make the application. In the meantime, a licence has been granted to Lucentis, which is slightly more expensive, but I hope as effective.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): On 1 March the Commons spokesperson for the Department for Environment, Food and Rural Affairs, the right hon. Member for South East Cambridgeshire (Mr Paice), stood at the Dispatch Box and pledged that the Government would bring forward proposals to tackle dangerous dogs and their owners before the Easter recess, yet still none has been published. It is nearly two years since the consultation on changing the law on dangerous dogs closed but, despite numerous promises from Ministers, still nothing has been done. On behalf of my constituents Angela McGlynn and John Massey, who tragically lost their four-year-old son, John-Paul Massey, and have been campaigning on the issue so that no other families have to go through what they are going through, I ask the Leader of the House please to inform us when we should expect a statement from DEFRA.
Sir George Young: The spokesman the hon. Lady refers to is my right hon. Friend the Minister of State, Department for Environment, Food and Rural Affairs. I will try to find out from the Department when we plan to publish our conclusions. It is important that we get it right. She might remember that in the 1990s the House legislated in haste on dangerous dogs and got it wrong. We are anxious not to make the same mistake again.
Nick de Bois (Enfield North) (Con): Will the Leader of the House grant a debate on the role of local government in supporting microfinance start-up companies, which might help my constituents understand why the Labour council in Enfield is disposing of the business innovation centre, which is profitable and provides valuable services but might now end up as a housing estate, which of course stands in sharp contrast to the support and funding received from the Conservative Mayor of London?
Sir George Young:
I am grateful to my hon. Friend for his question. I am not sure whether it will be possible for the Mayor of London to intervene in the project in my hon. Friend’s constituency and see whether even at this late stage it might be saved for the purpose he has outlined. I cannot promise an immediate debate on this subject. We are anxious that local government uses its powers to promote wealth and employment
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and create jobs in appropriate locations. I can only suggest that my hon. Friend applies for an Adjournment debate or a debate in Westminster Hall.
Thomas Docherty (Dunfermline and West Fife) (Lab): A number of Scottish newspapers have revealed a shocking history of domestic violence and child beating by a nationalist MSP, Mr Bill Walker, stretching over 30 years. Mr Walker, like all who commit domestic violence acts, has arrogantly refused to take responsibility for his actions and will not resign his seat. Will the Leader of the House confirm whether the Government will consult the Scottish Parliament on extending any new provisions for the recall of MPs to MSPs so that my constituents can be represented in the Scottish Parliament by a fit and proper person?
Sir George Young: I understand the hon. Gentleman’s concern. He will know that we have published a draft recall of MPs Bill. In fact, this morning the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), gave evidence to the Political and Constitutional Reform Committee, which is doing pre-legislative scrutiny. We have said that we will consider extending recall to the devolved legislatures, including the Scottish Parliament, as part of our overall consideration of responses to the inquiry. In the first instance we want to honour our commitment to the recall of MPs, but we have not ruled out extending it to the devolved legislatures at a later stage.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con): This week saw a report from the Department of Energy and Climate Change’s independent expert giving a green light to the resumption of fracking for shale gas in Lancashire. At the same time, my constituency has a third application before the Infrastructure Planning Commission for the storage of imported gas in excavated salt mines, Claughton moor has a second application for an onshore wind farm and, to cap it all, the National Grid now wants to build bigger and newer pylons to transmit power to newly proposed offshore wind farms. Is there any chance of having a debate on the cumulative impact of this on the people of Lancashire and their environment?
Sir George Young: There certainly seems to be a high concentration of energy-related projects in my hon. Friend’s constituency. On fracking, operations remain suspended. We are consulting on the Cuadrilla report and the independent expert’s recent report, but in the meantime no drilling will take place. I understand the other issues that my hon. Friend raises and the cumulative impact they have on his constituency. I cannot promise an early debate, but it sounds like a subject for a potential debate in Westminster Hall or on the Adjournment.
Derek Twigg (Halton) (Lab):
As further evidence that the Government are in a shambles, we have today seen figures showing shocking increases in waiting times for common operations, so may we have an urgent debate on the NHS and waiting times? As an example, during the past six months I have had more complaints from constituents about the NHS than I have had in six years,
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and of course the Government have been in place for two years. I think that that is indicative of how they are handling the NHS.
Sir George Young: I understand the hon. Gentleman’s concern. The latest figures I have seen show that for in-patients and out-patients average waiting times are around the level they were at two years ago, despite a big increase in throughput and the number of treatments. Waiting times might have gone up for some processes, but for others they have gone down. Fewer patients than ever are waiting a long time for treatment in the NHS, the number of people waiting for over a year has reduced by two thirds and, as I said a moment ago, the average time patients have to wait for treatment is at roughly the same level as it was two years ago. We are determined to maintain the progress we have made and have committed extra resources to the NHS, which the Labour party would not have granted it.
Mr Marcus Jones (Nuneaton) (Con): In the first two years of the Conservative-led coalition, council tax has been virtually frozen across England. That is in stark comparison to the previous Labour Government, under whom council tax doubled for my constituents and for people across the country. May we have a debate on council tax and value for council tax payers’ money?
Sir George Young: We would welcome such a debate. We had one in February when the House debated the revenue support grant—it is an annual debate—and those points were forcibly made. As in many parts of the country, when people decide how to vote in local elections I am sure that they will remember the Government’s benevolent treatment of council tax payers and the way we sought to protect them from the pressures on household budgets by enabling many local authorities to freeze council tax for two years running.
Nick Smith (Blaenau Gwent) (Lab): There has recently been wide media coverage by the television programme “Watchdog”, Private Eye and others of rip-off private car park operators. Car parking regulation is not working and motorists need better protection. May we please have a debate on that?
Sir George Young: My recollection is that we have banned the clamping of motor vehicles, which I think is now an offence. I hope that that will reduce to some extent the grievances to which the hon. Gentleman refers. If he has in mind any other changes to the legislation, perhaps he will be good enough to let me or my hon. Friends know and we will certainly look at them. We must get the balance right between, on the one hand, those who own property that they do not want to operate as free car parks and, on the other hand, motorists who are legitimately looking for somewhere to park their cars while they go about their business. I hope that we have the right balance, but if he has any proposals we will of course look at them.
Duncan Hames (Chippenham) (LD):
May we please have a statement on buses? The Leader of the House might have noticed the great interest in buses during Transport questions this morning, which was far higher
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than usual, following the publication on 26 March of the Government’s paper, “Green Light for Better Buses”, which I dare say is the most wide-ranging policy on buses we have seen since the Leader of the House was in the Department for Transport. Why did a Minister not make a statement to the House at that time?
Sir George Young: There is always pressure on Government time and we have to balance the House’s appetite for statements with the business before the House on a particular day, which is why we sometimes make written ministerial statements rather than oral ones. If my hon. Friend looks at the Government’s record, he will find that we have made more statements than our predecessors. Ultimately, it is a question of balance; a statement, which can last an hour, squeezes the subsequent debate, and if it is an Opposition day there are sometimes protests from Opposition Members. We try to get the balance right, but not every Government announcement scores an oral statement in the House.
[That this House is concerned about press reports that UK Olympians will be asked to wear sporting equipment produced by exploited child labour; is further concerned that successful Olympians will be presented with medals produced by multi-national company Rio Tinto who have locked out their entire workforce in Alma, Quebec without any serious consultation; and, therefore calls on the Government and the Olympics governing body to ensure that ethical trading standards will be maintained during a hopefully successful Olympics in the UK.]
Recent press reports suggest that exploited child labour is being used to make the sports equipment used by UK athletes, and now we hear that the company producing the gold medals, Rio Tinto, has locked out its entire work force since December last year. If we are to have a successful Olympics—we all hope that we will—ethical standards must be maintained by all involved.
Sir George Young: I endorse what the hon. Gentleman has said. Of course we should maintain high ethical standards. Like him, I want the Olympic games to be a great success. I will raise with the London Organising Committee of the Olympic Games and Paralympic Games the two issues that he has raised about the medals and the possible use of child labour, and ask Lord Coe to write to him.
Robert Halfon (Harlow) (Con): May we have a statement on which councils are providing value for money for taxpayers? Harlow’s Conservative council has frozen council tax not just for one or two years, but for the past three years, and has protected discretionary services. Does that not show that Conservative councils cost taxpayers less?
Sir George Young:
The short answer is yes. Perhaps I should not develop that too much, in view of what I said earlier about my Liberal Democrat friends. Under the last Labour Government, council tax doubled across England. This Government have worked with councils to freeze council tax for two years. I applaud what has
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happened in Harlow, where the council anticipated that policy by freezing council tax for a third year. Those who have an opportunity to vote next month must cast their votes according to the record to which my hon. Friend has referred.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Cleveland has seen a 1.2% rise in crime this week and has lost 224 police officers since May 2010, and yet the Home Secretary has never visited the north-east region to see the effects of her cuts. Can we have a debate on rising crime in the north-east, which is due to the Government’s cuts to front-line police?
Sir George Young: I think that the hon. Gentleman makes a mistake in drawing a direct correlation between the volume of crime and the number of police officers; it is a much more subtle equation than he implies. He will know that in many parts of the country, police authorities have coped with the challenging budgets without reducing the front-line effectiveness of the police force. I will see whether Home Office Ministers are able to visit the north-east to see at first hand what is going on. I hope that the police authority will respond to the challenge and maintain front-line effectiveness, as has happened in other parts of the country.
Richard Fuller (Bedford) (Con): May we have a debate on the political situation in Bangladesh, in particular to highlight the disappearance of a series of Opposition politicians, including Mr Elias Ali, the former Member of Parliament for Bishwanath in Sylhet, whom I met in Sylhet two weeks ago and who, along with his driver, disappeared on Tuesday evening?
Sir George Young: I understand my hon. Friend’s concern. The British high commission in Dhaka is taking this matter up with the appropriate authorities. Every effort must be made to trace Mr Ali and to ensure his well-being. I will pass my hon. Friend’s concern on to my right hon. Friend the Foreign Secretary.
Jonathan Ashworth (Leicester South) (Lab): The Leader of the House is very familiar with the review of children’s cardiac services. I understand that a decision on the unit at Leicester’s Glenfield hospital will be made on 4 July. Naturally, Members on both sides of the House have strong views on the review. Will he consider finding time for a debate before July in the next Session? The House last debated the matter last June. I think that many Members would appreciate the chance to make last-minute representations.
Sir George Young: I am, indeed, familiar with that issue. It is a matter that concerns Members on both sides of the House. It will be possible in the new Session to bid for time through the Backbench Business Committee, in Westminster Hall or on the Adjournment. I quite agree that this subject would generate considerable interest on both sides of the House. It is an important matter that deserves further consideration.
Christopher Pincher (Tamworth) (Con):
Earlier this week, Belgrave high school in Tamworth received the welcome news that its application to become an academy has been given the go-ahead by the Department for
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Education, affording its students, who suffer some challenging backgrounds, a real opportunity to succeed. I echo warmly the call of my hon. Friend the Member for Croydon Central (Gavin Barwell) for a debate on the opportunities afforded by academies, focusing particularly on the benefit of vertical integration between primary and secondary academies.
Sir George Young: My hon. Friend raises an interesting angle in the academy debate by drawing the House’s attention to the links between primary and secondary education. As I said earlier, GCSE records indicate faster improvement among schools that have become academies than in the rest of the school population. I hope that other schools in his constituency will follow the example of the one to which he has referred and go for academy status, with the benefits and freedoms that go with it.
Neil Carmichael (Stroud) (Con): The Government are rightly promoting the development and marketing of electric cars. In parallel, we need energy supplies that are consistent with our CO2 objectives. May we have a debate on energy infrastructure and on how we can develop electricity storage systems, because that would lead to technical developments that we could market abroad?
Sir George Young: My hon. Friend is right that if we are to hit our targets, we need to develop more effective methods of storing electricity. I understand that storage demonstration projects have been funded through Ofgem and through DECC’s low carbon investment fund. Announcements will be made in the summer about how the Department proposes to support energy storage innovation, which will include the examples to which he has referred.
Andrew Bridgen (North West Leicestershire) (Con): May we have a debate on truancy at primary schools? The latest figures show that almost 400,000 primary school pupils are absent for 15% of the school year or more, which is equivalent to a month out of school. I hope that all Members agree that addressing poor patterns of school attendance early would have major benefits not only for the pupils and families involved, but for the whole of society.
Sir George Young: I agree with my hon. Friend. He may have seen Charlie Taylor’s report, which was published on Monday, and the accompanying written ministerial statement, which supported the report and stated which measures would be taken forward. I agree that attendance at school is a key factor in driving up levels of achievement. We need to change the culture whereby it is acceptable regularly to take family holidays during the school year. We also need better statistics on truancy, which was another of the recommendations. I would welcome such a debate, but my hon. Friend may have to contain himself until the new Session.
Henry Smith (Crawley) (Con):
Many of my residential and corporate constituents have raised significant concerns with me about delayed and missing post in the Crawley area. Despite a Freedom of Information Act request by the Crawley Observer, Royal Mail has refused to release performance data for the RH10 and RH11 postcodes
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that cover my constituency. Will my right hon. Friend raise this matter with the Secretary of State for Business, Innovation and Skills? Will he also consider the need for a debate on the transparency of Royal Mail on its performance and customer service?
Sir George Young: We take very seriously information about the quality of service. My understanding is that Royal Mail publishes such information every quarter. Of course I will raise with Department for Business, Innovation and Skills Ministers the case of the two postal districts to which my hon. Friend has referred to see whether we can get those specific performance statistics. If they are deficient, I hope that Royal Mail will take the appropriate steps and drive up the quality of service to the level to which my hon. Friend’s constituents are entitled.
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Finance (No. 4) Bill
[Dawn Primarolo in the Chair]
‘was born after 5 April 1938 but before 6 April 1948’
‘is 65 or over at some time in the tax year, but under 75 throughout the tax year.’.
‘had been born after 5 April 1948’
‘is under the age of 65 throughout the tax year’.
‘was born before 6 April 1938’
‘is 75 or over at some time in the tax year.’.
‘had been born after 5 April 1948’
‘is under the age of 65 throughout the tax year.’.
I rise to speak to the amendments and to oppose clause 4, which will freeze age-related allowances for those who are receiving them and abolish them for those who are approaching retirement. I hope that Members from all parts of the Committee will join us in our opposition this afternoon. Defeating the clause would prevent a real-terms increase in tax for millions of older people in this country, which will cost £83 a
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year for 4.4 million people on modest incomes and as a much as £322 for 360,000 people who will reach the age of 65 next year.
We are seeking to reverse the Government’s freezing and abolition of age-related allowance for three simple reasons: first, that tax increase adds to the financial pressure already felt by older people on modest incomes facing rising costs; secondly, it picks the pockets of pensioners to fund an irresponsible tax cut for millionaires; and thirdly, the way in which it has been introduced adds insult to injury, breaking a promise made by the Chancellor just a year ago and using the language of tax simplification to cover up what is clearly and simply a tax grab.
Alun Cairns (Vale of Glamorgan) (Con): The hon. Lady is expressing opposition to the freezing of the age-related allowance. Did she express the same opposition when the last Chancellor did exactly the same in the Labour Government’s last Budget?
For the reasons that I have given, pensioners from the National Pensioners Convention have come to Parliament today to lobby MPs to vote against the change. Let us take each issue in turn and consider who will be hit, because there has been some myth making by defenders of the granny tax about how only well-off pensioners will be affected. The truth is, those who will be hit have very modest incomes.
Harriett Baldwin (West Worcestershire) (Con): The hon. Lady refers to the “granny tax”. I know that she, like me, would really like to see older women retiring with the same income as men over time. Does she therefore accept that 60% of the effect of the freezing of the age-related allowance will be on men and 40% on women, so it should not really be referred to as a granny tax?
Rachel Reeves: The money involved will not alleviate the pressure on women in retirement. It will all be used to give a tax cut of £40,000 to 14,000 millionaires. The hon. Lady talks about women in retirement, and it was Government Members who voted to increase the state pension age for women with just five or six years’ notice, hitting them by up to £15,000 in lost retirement income. We will not take any lectures from them about the matter.
Derek Twigg (Halton) (Lab): I notice that we have not heard much about fairness or about the big tax cuts being given to millionaires in the interventions by Government Members. Is it not true those retiring next year with personal or occupational pensions of as low as £67 a week could be affected by the change to age-related allowance? The Government are attacking a group of pensioners with modest incomes, which will be a particularly devastating blow in the most deprived areas such as Halton.
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My hon. Friend points out the evidence that we have commissioned from the House of Commons Library, which shows that a small personal or occupational pension of just £67 a week, or little more than £3,000 a year, would be enough to put someone in the firing line of the additional tax. People with such pensions are not the privileged few, living a life of luxury in retirement. The measure will hit millions of people who have worked hard in ordinary jobs and managed to set aside just enough to give them a small pension that relieves them of reliance on means-tested benefits and allows them to have some security in retirement.
“Amid all the talk of tax cuts…the main tax-raising measure”
“consisted of a stealth tax increase on older people who did actually work and save hard for their future.”
“this tax change offers no incentive to save”,
“come as a blow to millions of pensioners who have paid in to the tax system throughout their working lives. Pensioners with modest amounts of pension saving stand to be the biggest losers.”
Brandon Lewis (Great Yarmouth) (Con): Putting aside the fact that people on incomes such as my hon. Friend the Member for Redcar (Ian Swales) mentioned would pay zero in tax, which makes the hon. Lady’s argument purely academic at best, is it not true that she is referring to the same group of people who have just had the biggest ever increase in their pension? That is much different from the previous Labour Government’s 75p insult.
Rachel Reeves: The people who will be hit by this tax are those who have an income in retirement of between £10,500 and £25,000 a year. They will pay tax at 20% on any income over £10,500 a year. That is why 4.4 million pensioners will lose out by an average of £83 next year. People retiring next year will lose out by up to £322. That is the reality of the change that we will vote on this afternoon.
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Nick Smith (Blaenau Gwent) (Lab): I understand that age-related benefits were an idea put forward by Winston Churchill. Does my hon. Friend think that George Osborne knows better than Winston Churchill?
Jacob Rees-Mogg: Winston Churchill, a very great man, took us back on to the gold standard as Chancellor. If we were to follow every proposal of Winston Churchill’s as Chancellor, we would find it very difficult to run the economy.
Rachel Reeves: I thank the hon. Gentleman. His constituents have had a hard time in the past few days. Older people will be hit by the changes to pensioners’ tax allowances, and of course the pasty industry in Cornwall and the south-west will be hit hard, so there is a double hit for his region.
We need to remember the situation that most pensioners face. They do not have ways of making up for a loss of income by going out and finding work. That is what it means to be retired. They are therefore particularly vulnerable to rises in the cost of living and to unanticipated changes in their financial circumstances. The Office of Tax Simplification report notes that the current age-related allowance was
“introduced to reflect potentially higher costs of living of older people.”
“Older people can struggle to meet living costs. They are often on a fixed income once they have retired, or perhaps on a declining income in real terms where flat annuities have been purchased”.
Katy Clark (North Ayrshire and Arran) (Lab): I understand that one reason why the age-related allowance was originally introduced was the higher cost of heating when people are older. Does my hon. Friend agree that that is particularly important now given the rising cost of fuel, and even more so in parts of the country where the weather is worse, such as the north and Scotland?
Rachel Reeves: It has been pretty cold in my constituency in Leeds this winter, as well. My hon. Friend is right to make that point, because people face many extra costs as they get older, such as in heating their home.
Robert Flello (Stoke-on-Trent South) (Lab):
I am enjoying my hon. Friend’s speech, and she is being extremely generous in allowing hon. Members of all parties to intervene. To continue her point, pensioners now face an increase in the cost of not only gas and electricity, but of a decent, healthy meal that will sustain them. As people get older and more frail, they need to ensure that they eat proper, decent, balanced meals. Costs are going through the roof all the time and
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constituents such as mine will look at their weekly household bills and be horrified. To add this insult to that injury is simply a disgrace.
“has to be considered in terms of the cumulative impact. Fuel prices continue to rise, and that is a key worry; 43% of the people who come to us are worried that they will not be able to meet their fuel bills. We have examples of people coming into our bureaux who do not heat their homes because they are worried about not being able to afford it... This group of people very often have to rely on their savings in order to live in their retirement, and they are getting very low interest on them.”
Moreover, pensioners have already been hit hard by the Government. The winter fuel allowance has been cut; pensions have been indexed to a lower measure of inflation; the raising of the state pension age for women has been brought forward, and last year’s VAT rise has added £275 to the costs that an average pensioner couple faces. Evidence from the Institute for Fiscal Studies to the Treasury Committee confirms that, as a result of the tax and benefit changes that the Government have implemented, the incomes of pensioner households have fallen by 1.4%, and most have little prospect or opportunity of making up that loss.
Rachel Reeves: We do not know what the economy will look like in three weeks, let alone in three years. The Government’s choices are making our economic prospects worse and worse. In the past year, the Office for Budget Responsibility has had to revise down its forecast for UK growth three times. It is now expected to be a third less than it was a year ago. We will publish our manifesto before the next election, but it will be very different from Government Members’ manifestos because we prioritise hard-working families, not a tax cut of £40,000 for 14,000 millionaires. That is why we will vote against the provision this evening.
The Exchequer Secretary to the Treasury (Mr David Gauke): On the Government’s treatment of pensioners, the hon. Lady mentioned uprating the state pension. She will know that we have introduced a triple lock so that the state pension increases by the higher of 2.5%, CPI or earnings. She will also know that, according to the plans we inherited, pensions would rise in line with earnings. As a consequence of the increases by CPI rather than earnings, the state pension has increased by £127 more a year than it would have done under the plans that we inherited. Does she accept that?
Rachel Reeves: Not many Governments would want to take credit for the fact that inflation has reached 5.3%. Pensions have had to rise by just over £5 to compensate for the increase in the cost of living for pensioners. The Government increased VAT and took no action to tackle excessive gas and electricity bills, and that is why inflation is so high for ordinary working families and pensioners.
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Mr Gauke: I perhaps forlornly hoped that the hon. Lady would concede the point that the state pension has increased more under us than it would have done under the previous Government’s plans, which would not have increased it in line with the rate of inflation.
Rachel Reeves: That is like suggesting that if inflation was 10% and the Government had to increase pensions by £10 a week to keep pace, pensioners should celebrate and thank them. Of course they will not thank them because the increase in pensions only keeps pace with the rising cost of living. If the Government want to take credit for record high inflation, be our guest.
Many of the worst cuts are still to come. Analysis of the 2010 spending review showed that, on average, pensioner couples would be hit hard by cuts to services, amounting to £1,275 a year or 6% of their household income, while single pensioners stood to lose services worth £1,300 a year or 11% of their income. As we heard from the Treasury Committee yesterday, many pensioners are also paying a price for the Government’s failure to get the economy moving because the Government are relying on the Bank of England to undertake more quantitative easing to prevent the economy from sinking deeper into recession. That means that annuity rates and returns on pensioners’ savings are lower than they would otherwise be.
Brandon Lewis: The hon. Lady referred to the increase in the pensioners’ allowance and linked it to inflation. How high would the Labour Government have moved it in the current circumstances of inflation? How would they have paid for that with council tax rises elsewhere?
Rachel Reeves: I return to my earlier point: if inflation was 10% and pensioners got a £10 increase in their pension, would Government Members celebrate and say that that was huge largesse for pensioners? It is not; it just keeps pace with the cost of living. The increase in VAT, and the increases in gas and electricity prices, which the Government have done nothing to tackle, and the rise in petrol prices, mean that the cost of living for pensioners and other families has increased enormously because of the Government’s choices.
There is a further hit to pensioners’ incomes, buried in the detail of the Budget documents. This year, an estimated 300,000 pensioners stand to lose their savings credit, while others stand to lose as much as £276 a year as a result of reduced rates of savings credit. Under the Chancellor’s latest plans, the savings credit will be abolished completely, costing more than 100,000 new pensioners as much as £897 a year: another stealth tax that the Chancellor tried to slip past pensioners; another slice taken from the constrained budgets of ordinary families.
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election—I like to think that Government Members have already conceded defeat—what about the Government’s backing off now and reversing the dreadful decision?
Rachel Reeves: I thank my hon. Friend and congratulate him on hosting the National Pensioners Convention in Parliament today. It came to make the very point that my hon. Friend just made, and that pensioners made to us in the Committee Room earlier. Some Government Members would do well to listen to some of the pensioners in their constituencies.
It adds insult to injury for the Prime Minister and other Government Members to tell pensioners that they should be grateful for a rise in the basic state pension that merely matches the rate of inflation. It is not a rise—it simply keeps things level. If Government Members do not know the difference, they should get out into the real world, where the costs of food and fuel are going up and it is getting harder and harder to make ends meet.
Rachel Reeves: The idea that pensioners have been protected from the squeeze on living standards is simply not true. It is divisive and distorts reality when Government Members try to make that point, and conceals the fact that many older people are under genuine pressure. We should do what we can to help them, not see pensioners as a soft target for stealth taxes, as the Chancellor so clearly does.
Julie Hilling (Bolton West) (Lab): The increase in pensions has not actually kept up with the cost of living, because if the Government had not been so mean as to change to CPI, but had used RPI, pensioners would have an amount of money that kept in touch with the increasing cost of living.
Rachel Reeves: I thank my hon. Friend for that intervention. All hon. Members know that the average rate of inflation for pensioners is often very high—higher than it is for ordinary families—because they spend more of their income on gas, electricity and food, the rates of inflation for which are going up at a higher rate.
Fiona O'Donnell: In constituencies such as mine, many pensioners live in rural communities without access to public transport, so we need to add into the mix the cost of running a car, which is essential to their quality of life.
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wholly untouched by the tax increases that we are debating. Indeed, those with incomes over £150,000, including, we might note, some members of the Cabinet, will benefit from the cut in the 50p rate of tax that we debated yesterday.
Richard Harrington: I am so extremely grateful to the hon. Lady for giving way—I hope she will forgive my perseverance. Having listened to her argument in some detail, I should like to ask her a question. Principle is very important to her. Does she believe that under-65s should have a lower personal allowance than over-65s as a point of principle?
Rachel Reeves: Winston Churchill was right in 1925 when he introduced that measure. People who are retired have fixed incomes, as a result of which there are more pressures on them and they cannot make up the additional changes. That is why the Opposition will vote against the Government’s change. We do not think it is the right priority or the right thing to do at this time, especially because the money is not being used to help young people to get back to work, to help the poorest pensioners or to help families of children who are struggling with the rise in the cost of living. Instead, the money is being used to give a tax cut of £40,000 to 14,000 millionaires. I can tell the hon. Gentleman what my principle is: we should prioritise ordinary families, ordinary pensioners and young people who are out of work, not those on multi-million pound salaries. That is my principle and those are my priorities. I am sorry that Government Members do not share them.
That is the second reason why the Opposition are opposing the tax increase on millions of modest-income pensioners. As my hon. Friend the Member for Pontypridd (Owen Smith) so eloquently expressed on Monday, the measure is unfair and unnecessary when the Government are spending £3 billion on a tax give-away for the richest 1%. Hon. Members will remember that, originally, the Government said that the 50p tax cut would be paid for by a mansion tax and a crackdown on tax avoidance. However, the cut costs 10 times as much as is raised by the new measure on stamp duty—the Chief Secretary’s sorry substitute for a mansion tax—and more than three times as much as is raised in the Budget by reductions in tax avoidance. In fact, cutting tax avoidance should be part of every Budget anyway, and the money raised by measures to tackle tax avoidance in this Budget is less than the average reductions in tax avoidance achieved by Labour’s Budgets. In addition, we have since discovered that the Government’s definition of tax avoidance includes donations to UNICEF, Macmillan, the Royal National Lifeboat Institution and other charities that do fantastic work in our communities. That the Government cannot see the difference between tax avoidance and giving money to worthwhile causes again shows how out of touch they are.
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of pensioners with modest incomes. Where does it all go to? Does it go towards paying down the deficit? No. Does it help young people to get back to work? No. Does it help poorer pensioners? No—they have been hit too by VAT rises and service cuts. Instead, the money, which is being taken from those with pensions of just a few thousand pounds a year, is being spent on a tax cut for people for whom this tax grab would have counted as mere small change.
The Government were said to have been surprised by the anger that the measure has aroused, but that again goes to show how out of touch they are with the reality faced by most people, and how far they have strayed from the values and priorities of the British people. It goes to the heart of the problems that the Government face and the problem with their conception of fairness, and the callous arrogance with which they have abandoned the pretence that we are all in it together.
“we feel it is disappointing that the Budget offered a tax break of at least £10,000 to the very wealthy while penalising many pensioners on fairly modest incomes who are already being squeezed”.
“Over the next five years, pensioners with an income of between £10,500 and £24,000 will be paying an extra £3 billion in tax while richer pensioners are left unaffected.”
“We have been inundated by pensioners who are disgusted that those on around £11,000 a year will no longer get additional reductions in their tax…whilst those earning £150,000 or more will see their tax bills reduced. This is seen by many as the last straw…Pensioners feel they are being asked to bail out the super rich…and it’s simply not fair.”
Age UK, Saga, and the National Pensioners Convention have hit the nail on the head. It is just a shame that the Chancellor and the Prime Minister are so blinded by the demands of the super-rich that they fail to see it.
Finally, it is worth recognising that the measure is not the only reason why people are so angry. It is not just the blatant unfairness that has offended people, but the way in which the change was announced. Most people believe that our older generation deserve to be treated with respect and dignity, yet this Government and the Chancellor tried to get away with going back on a previous promise by dressing up a tax grab as a “simplification”. Just one year ago, on page 35 of the 2011 Budget Red Book, people were told:
“For the duration of this Parliament…the age related allowance will be over-indexed”
“CPI and will increase by the equivalent of the…RPI”.
What the Chancellor said then was clear and unmistakeable, but that is another broken promise by the Conservatives and their Liberal Democrat friends. The Institute for Fiscal Studies agrees. It says that the Chancellor
“should have avoided dressing up what is clearly a tax increase as merely a simplification”.
“We are concerned that you announced the change to age allowances as a way to simplify the tax system and indeed the Budget Report lists the change under…‘Simplification’... rather than under ‘Personal and Property taxes’”.
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The Chancellor also attempted to hide behind the Office of Tax Simplification, but its director has told the Treasury that attempts to use its recommendations as a cover for his tax grab are “not 100% accurate”. The relevant report by the Office of Tax Simplification states clearly:
“we would stress…that the Office of Tax Simplification has not reached any conclusions as to the best way forward with age-related allowances, nor have we formulated detailed recommendations”.
It is all too clear why the Chancellor did not bother to wait for the final OTS report: he was not really interested in simplifying taxation for older people. Rather, his single-minded focus and overriding priority was getting his millionaires’ tax break through, and he was willing to fund it by cutting the incomes of pensioners.
In conclusion, we all know what an embarrassment this Budget has become to Government Members. We know how it has shaken their confidence in the strategic genius of the Chancellor and that many of them have heard from constituents who are anxious about the impact that the measure will have and angry about how the Government have treated people who deserve better.
Therefore, today, the Opposition are glad to be giving Government Members an opportunity to make amends and a chance to dissociate themselves with this disreputable raid on the incomes of older people. They have a choice. Do they stand with the millions of people who have worked hard and saved what they can? Or do they stand with the Chancellor and his friend, the Chief Secretary, who see pensioners as a soft touch ripe for a sneaky tax grab? The Opposition know whose side we are on. We are about to find out whose side Government Members are on.
Ben Gummer (Ipswich) (Con): I am pleased to follow the hon. Member for Leeds West (Rachel Reeves) in this important debate. It is important because it touches on perhaps the greatest challenge facing politicians and representatives in this Chamber. She is a luminary of the new Labour party and one of the stars of her intake, and it is always a pleasure to hear her in the Chamber and on the television. No doubt, at some point, she aspires to high office not only in her party but in government. [Interruption.] There is no punch line. The hon. Lady is no joke. It is important to remember that, at some point, Labour will form a Government. I hope it is not too soon, but it is in the nature of our democracy, and a fine thing, that we swap sides now and again.
Richard Harrington: I was interested to hear my hon. Friend’s comments about Labour’s prospects of forming a Government. I listened to the comments about pensions from the hon. Member for Leeds West (Rachel Reeves). Does he think I will be a pensioner by the time Labour forms another Government?
The key challenge facing us is the extraordinary rate of demographic change in this country. Between now and 11 minutes past 3, the average age at which people are expected to die in this country will increase by 15 minutes. As a consequence, by 2041, the amount we spend on old-age pensions will have increased from about £80 billion now to £250 billion, even with the changes introduced by my right hon. Friend the Chancellor
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and his colleagues. Even with the reforms that the Government have initiated, we will deliver to our successors in this place—including the shadow Chief Secretary to the Treasury—a formidable challenge, and not only have we not properly faced up to the challenge but we are not talking properly to the public about it.
I can understand why Labour Members have tabled amendments on VAT and other matters—they can make their political points about the balance in the Budget and the Finance Bill with complete justice—but I am seriously disappointed that they have tabled amendments on this issue, because it is the most modest start to trying to deal with what is a really big and fundamental problem for us all.
Mark Field (Cities of London and Westminster) (Con): My hon. Friend is making a sensible and thoughtful speech and some important points. The hon. Member for Leeds West (Rachel Reeves) prayed in aid changes made by Sir Winston Churchill 87 years ago. However, the numbers qualifying then for any sort of pension, let alone an age-related one, were minuscule compared with the numbers qualifying today and in decades to come.
Ben Gummer: My hon. Friend is entirely right. When Sir Winston Churchill served in Lloyd George’s Cabinet and the Liberals introduced the universal pension—one of that Government’s great achievements—a quarter of people never reached pension age. They never got to the point where they could draw down their pension. We are in a completely different place now.
I am not proposing to the Committee that we start now to think about the wholesale and widespread pension reform that is required, but surely we should start by trying to change some of the anomalies, and this anomaly is such a glaringly obvious one. At the moment, Members on both sides of the House, including those of us who represent constituencies with many low-earners—low-earners with families struggling desperately—are telling our constituents to pay a different rate of tax from pensioners, who, only because of their age, qualify for a different allowance.
Ben Gummer: The hon. Lady asks about the party manifesto. I had hoped to discuss the broader issues and great challenges facing us. Manifestos are, by their nature, broad brush, and this is such a tiny change to the tax system in the grand scheme of what the Treasury has to deal with. It is entirely right that the Government are, bravely, addressing it now. In all honesty, would either party go down to such detail in any future manifesto? It is entirely right that the Government are saying, “This is an anomaly. It is incorrect and unfair, and what is more, it is one of the many anomalies that are unaffordable in the long term.”
I hear time and again the Government saying that things are unaffordable and raising spectres of vast pensions bills in the future. This is a simple matter of transferring money from one group of people
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to another—namely, from the rich to the less rich. Were the abolition of the 83p rate by Mrs Thatcher and Geoffrey Howe and of the 60p rate by Nigel Lawson and getting rid of the 15% surcharge on unearned income all anomalies?
Ben Gummer: I profoundly respect the hon. Gentleman. He is a torchbearer for a former age in the Labour party, and he should raise that point with his own Front-Bench team. We are clearly not going to agree on it. However, at some point, someone needs to face up to the fact that we will almost double spending on old-age pensions between now and 2040. I shall put that in context: the number of people retiring this year who will be alive in 2041 will be more significant than now. I cannot give the precise figure, but hundreds of thousands of people retiring in the next few years will be alive in 20 or 30 years. We are not only dealing with an intergenerational problem, with a problem between this generation and a generation in two or three generations’ time or with a problem between people in their 20s and those in their 60s or 70s; we are dealing with a problem of those retiring now and to whom we must promise pensions and a decent standard of living in 30 years’ time. The ability to afford that is at the crux of the Government’s reforms, and this proposal is just the start of it.
Graeme Morrice (Livingston) (Lab): My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) asked why, if this was such a wonderful proposal, it was not in the Conservative party’s manifesto. My question is this: if this is such a wonderful proposal, why was it the only one not leaked before the Chancellor’s statement?
Ben Gummer: The hon. Gentleman knows that that is not the case. [Interruption.] Well, it isn’t. I was endeavouring to have a wider debate about the importance of the reform in the context of the massive pensions challenge and of trying to pay for the pensions of vulnerable people not just this year but in 10 and 15 years.
Nadhim Zahawi: I take my hon. Friend back to Labour’s chances of forming a Government. Does he agree that that requires credibility, and that credibility is built on taking debates such as this one as seriously as he is taking them and addressing these important issues, rather than just jumping on bandwagons, being opportunistic and misleading the nation at the precise time when the nation requires real leadership?
Ben Gummer: I thank my hon. Friend for his intervention and for his compliment, because I, too, could be critical of the Government in one respect—[Hon. Members: “ Ah!”] Itis not a criticism of the policy. None of us in this place has yet started to be completely straight with people about the enormous scale of the challenge that faces us.
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Sheila Gilmore: The hon. Gentleman’s discussion about the issue of old people is interesting, but is it not the purpose of this provision not to provide greater pensions—or, perhaps, better social care—but to balance the cut to the 50% tax rate?
Ben Gummer: I wish we could deal with this canard. I did not want to be political about this—[ Interruption. ] No, I tell the hon. Member for Nottingham East (Chris Leslie) that I did not. Five times more revenue is being taken from the wealthiest people in this country as a result of the Budget than from reducing the top rate of tax. That argument has been dealt with and, although it is pity, I suspect that that is why the hon. Member for Leeds West, who is a serious-minded and intellectual member of the Opposition Front-Bench team, realises that the only way she can make an argument about this issue is by trying to shackle it to a false argument about the top rate of tax, to which it has no relation whatever. This is about beginning to reform provision for people who are retiring in our country. If we do not begin to make these small changes, we will not even be in a position to make the changes that will be necessary in future.
Mark Field: My hon. Friend was absolutely right when he said earlier that we have collectively been living well beyond our means. That over-consumption by today’s Britons, including today’s pensioners, will have to be paid for by generations to come, and that cannot be justifiable. Given the interventions on him from the Opposition, does he agree that we made it clear before the election in our manifesto that we would maintain intact all the universal benefits—in particular, TV licences, the winter fuel costs and a lot of the travel allowances, along with a significant number of other pension-related benefits—that we have been true to our word and that we will remain so for the rest of this Parliament?
Ben Gummer: My hon. Friend represents a seat with a huge personal vote. I was not lucky enough to take over from a Conservative Member of Parliament with a huge personal vote such as his. I was therefore targeted in the last few weeks of the campaign by the Labour party and its union friends, who issued a series of postcards claiming that we would abolish the winter fuel allowance, free TV licences and all those other things. It is a matter of great pride to me that even in coalition, when compromises must be made, those promises, made by my right hon. Friend the Prime Minister, were kept.
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Anna Soubry: I am sorry that I had to leave the Chamber for a short period, but I am extremely grateful to my hon. Friend, who is making an important and thoughtful speech. However, I am sure that, like me, he will have received e-mails and letters from pensioners in his constituency who are worried that their real incomes are in some way being cut by this Government. What would he say, not only to the pensioners in his constituency, but to those in mine—and no doubt in many other constituencies—who are worried about their futures?
Ben Gummer: My hon. Friend is right in two senses. Everyone is concerned about their standard of living. That is the nature of recovering from this terrible recession, which has many causes. As a Government, we are in the position of having to make very difficult decisions. Again, it is a point of great pride to me that we are being brave enough to make those decisions and to spread the load throughout the entire taxpayer base. It is a matter of extraordinary difficulty, but the group that has been hit least so far by the savings, efficiencies and cuts that the Government have had to make has been pensioners, because they have benefited from the triple lock and a whole series of other interventions by the Government, and because they are not recipients of other benefits. As a result, this measure is probably the most modest incursion into pensioner income.
Ben Gummer: I will, but before I do, let me say in response to that intervention that there are many pensioners in my constituency who are on very low incomes. They are suffering considerably at the moment. Most of them do not have incomes anywhere close to the current allowance. What we are trying to do—in improving their lot through the triple lock guarantee, as well as protecting the pension credit, the winter fuel payments, the cold weather payments and the free TV licences—is protect the benefits of those who are least able to look after themselves.
My hon. Friend the Member for Broxtowe (Anna Soubry) is right in another sense. It is not just today’s vulnerable pensioners whom we must look after and seek to help, but the vulnerable pensioners in 20 and 30 years’ time. If we do not make changes now and try to protect the state’s income to some degree, we will not be in a position even to afford the benefits and pensions that we promise people now, let alone to anything like that degree in 20 or 30 years’ time, and that will be a problem for both parties.
Dr Eilidh Whiteford (Banff and Buchan) (SNP): Obviously the proposals that we are talking about today do not apply to the very poorest pensioners or the better-off pensioners. However, let me ask the hon. Gentleman a simple question: what incentive will there be for people to save for their retirement?
The hon. Lady is entirely right. One of the terrifying things that comes out of all public opinion surveys is the lack of savings and even the lack of people expecting to save for their old age. I hope that the reforms brought in by the Minister responsible for
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pensions—the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb)—for auto-enrolment and encouraging savings will be the beginning of a fully funded pensions system.
However, that is for another debate. I am aware of the strictures regarding Committee time and the fact that other Members wish to speak. I would therefore like to make one final comment. Lord Turner’s 2005 report, which was commissioned by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), said that
“unless new government initiatives can make a major difference to behaviour, the present voluntary system of pension savings, combined with the present state system, is unlikely to deliver adequate pension provision.”
Moreover, he went on to say that the only means of achieving that would be through cross-party consensus. If we are to be serious about providing decent pensions, not only to people today, but to people in five, 10 and 15 years’ time—that includes people retiring this year and next year, who will be in their 80s and 90s when we will really be starting to pick up the bill—all parties must, between us, come to some sort of consensus about the difficult decisions that need to be made.
Mark Durkan (Foyle) (SDLP): In that context, does the hon. Gentleman agree that if we are to encourage confidence among people out there that they can commit to planning and saving for their pensions, no Government should ever engage in an easy drive-by hit on pensioners?
Ben Gummer: The hon. Gentleman would be right, were the changes in the Bill modest to that degree. They represent a freeze for those who are already receiving the allowance, which will be merged into the basic rate allowance which will then move up towards it. In that regard, the taper could not be more gentle.
It is entirely right to say that the Government need to sketch out a very long-term plan for pensions, and I know that the Pensions Minister is beginning that process, but it will need the support, input and intellectual vigour of Members such as the hon. Member for Leeds West if it is to be a success in the long term. Otherwise, we and our successors will be unable to pay the bill, and pensioners will be freezing and starving as a result. The bill will be unaffordable and we will be fighting to pay it against a global economy in which we are unable to compete. That is a terrifying prospect, and I hope that we can begin to deal with it now by supporting the Government in what I hope is the first of many of the changes that need to be made in order to protect the living standards, the decency and the dignity of those people who have worked hard all the way through their lives.
The Temporary Chair (Mr Bone): Order. I remind right hon. and hon. Members that, because of the programme motion, this debate has to finish at 4.38, and that the Minister has to reply to it. Short speeches would therefore be appreciated.
I will try to keep my remarks short. I have listened to today’s debate with great interest. First and foremost, it is important that we take proper account of the long-term erosion of pensioners’ incomes over
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the past three decades, since the link between earnings and the state pension was broken, and of the more recent pressures in the wake of the financial crisis.
The changes to age-related allowances that we are discussing will not affect the poorest pensioners or those who are comfortably off. They will, however, affect the 40% of pensioners who have modest incomes. Those people have saved for their retirement, and 4.4 million older people will be worse off as a result of the changes.
Katy Clark: I agree with everything that the hon. Lady has said so far. Does she agree that a subject that we do not discuss often enough is that of pensioners who rely on their savings? Low interest rates mean that they are currently getting a far lower income from their savings than they had envisaged.
The Government have made great play of the recent increases to the state pension, and seem to suggest that they will somehow offset the changes to the tax allowances. As the hon. Member for Leeds West (Rachel Reeves) pointed out, however, we must remember that that is simply an inflationary rise. It will only keep pace with prices; it is not an increase. It is only a small step in the right direction towards restoring pensioners’ incomes to a level that most of us would recognise as providing a decent standard of living.
I have mentioned in the House before that the way in which pensioners experience inflation can differ markedly from the way in which the general population as a whole experiences it. One of the most obvious and significant examples of that relates to heating and domestic fuel costs. Retired people are more likely to have to heat their homes during the day, while the rest of us enjoy the benefit of our workplace heating systems. Many pensioners also find it harder to keep warm because of their age and the fact that they are not moving about so much. So any inflation in the cost of energy is felt disproportionately by pensioners, and nowhere more so than in those parts of these islands that experience consistently colder weather.
Last year, we saw sharp and dramatic increases in home energy costs, which played a big part in driving inflation up to over 5%. Energy prices have come down since that peak, but I heard on the news this morning that some economic commentators believe that inflation this year is going to be well above the Bank of England forecasts that the Government are using, and that we could experience inflation of over 3% this year as well. The welcome increases in the state pension have only kept it in line with inflation and might not keep it in line with inflation as it is experienced by people of pensionable age. That is why the Government’s argument that the changes to age-related tax allowances are compensated for by the increases in the state pension is somewhat spurious. In real terms, this tax grab squeezes the incomes of pensioners on modest incomes.
It is also all too easy to forget that pensioners have already paid a heavy price for the financial crisis. Those pensioners affected by these new changes to age-related allowances are in many cases the same people who saw
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the value of their savings and investments plummet in the wake of the financial crisis. Since then, they have had to contend with record low interest rates, coupled with high inflation. As the Treasury Committee reminded us earlier this week, quantitative easing, whatever its intended consequences, has had some very nasty side effects for those reaching retirement age and looking to buy an annuity in the last few years.
Fiona O'Donnell: The hon. Lady, like me, has many pensioners in her constituency who are on modest incomes and thought they could afford to live out their retirement and be able to cope with running a car, higher food prices and all the other added costs of rural living. Does she agree that this change is going to wreck the plans of many of those pensioners?
Dr Whiteford: I agree entirely. It is about not only rural and transport costs, but increases in VAT, cuts in fuel allowances and so forth. All these things have put a real squeeze on people living on fixed incomes, who have little opportunity to find money from any other source. These have not been easy financial times for those on fixed incomes, who have been the forgotten victims of the financial crisis. It is not fair to say that pensioners have got off lightly so far from the public spending squeeze—quite the reverse. In considering changes to age-related allowances, we need to understand that the granny tax will tighten the screw on people who have already had significantly to tighten their belts in recent times.
Those affected by this measure are all living on below-average incomes. Most will have paid tax throughout their working lives, and most thought they were doing the responsible thing by saving for their retirement. Crucially, they do not have the opportunity to find alternative sources of income. They are on fixed incomes and are living off savings.
Stephen Williams: The hon. Lady just said that this group of people are on below-average incomes. That might be true across the broad span of the population, which includes people in work on enormous salaries, but for pensioners, surely they are on way-above-average incomes.
Dr Whiteford: The hon. Member for Leeds West pointed out that nobody on an income of more than £25,500 a year will be affected by this measure. Frankly, with average earnings above that, I do think that most of those pensioners are living in what most people would consider to be quite modest circumstances, particularly when, as I have already argued, they have to pay much greater heating costs. Their lifestyles are not without particular burdens that they have to bear, and they do not have a chance to improve them.
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The Government had a chance to regain the confidence of pensioners after a long hiatus and much erosion of the position of pensioners over a number of decades, but they have squandered that opportunity. They are sneaking through these proposals in the fine print, claiming that they are for simplification. That undermines whatever confidence pensioners had left in them. On the streets of my constituency, people have been angry to see that what has been given with one hand as a modest increase in the state pension has been taken away from their occupational pension with the other hand.
We are leaving pensioners without any real incentive to save. We are not going to tackle the challenges of our changing demographics with that kind of attitude because people will question whether it is worth their while putting money aside for their retirement. I do not think that is a way forward, and I hope the Government will step back from this very regressive measure.
Margot James (Stourbridge) (Con): I welcome the Budget, which has been a Budget for enterprise and growth, and I would defend the reduction in the top rate of tax, which seems to be the Opposition’s main bone of contention. I think older people have a stake in the future of our economy just as great as everybody else. There is no doubt in my mind that the introduction of that 50p top rate of tax by the last Government—right in the last throes of the last Government—was extremely damaging to our country’s image as a place of business, growth and prosperity. I am glad that the Chancellor has taken the brave step of reversing it in part.
Katy Clark: The hon. Lady will be aware that the income of the very rich has increased by 20% over the last two years since her Government came to power. Politics is, of course, a question of choices. Does she not think that our choice should be to try to get money from those people rather than from pensioners on modest incomes?
Margot James: I thank the hon. Lady for her intervention. I notice that she cited the last two years over which the incomes of the very wealthy have increased, but she might equally well have quoted the last 12 years of the Labour Government, during which I believe top earners did extremely well. It is a question of choices, and I feel that the Chancellor has made the right choice. In fact, it is a set of choices: it is not just a choice between one thing and another. I think it essential for this country not to be out of kilter with the rest of the world in terms of its top rate of income tax.
Margot James: I wanted to begin by setting the scene and explaining why I thought that the Budget represented a step forward, but as the debate is actually about the age-related allowance, I will make a bit of progress on that subject now.
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It was suggested earlier that 14,000 millionaires would benefit from the tax reduction. I am not sure how Labour Members arrived at that figure, but surely the notion that all our problems could somehow be solved if the rich paid their way is the nub of the issue. Given the relative scarcity of rich people in comparison with the vast majority of the electorate and as a proportion of the United Kingdom’s population of over 60 million, it is an absolute myth that we could solve all our problems by imposing heavy taxes on bankers and other rich people.
Margot James: I thank my hon. Friend for his intervention, which prompts me to remind the House that the top 1% of wealthy people in this country account for 30% of tax revenues. As my hon. Friend has pointed out, they constitute a very small segment of the population, and I think that if they are required to contribute any more than a third of the total, many will choose to go overseas where they will be taxed less.
Margot James: I want to make some progress on the main subject of the debate, which is the freezing of tax allowances, but first let me make a couple of other points. Labour Members did not mention that the other thing that the Budget has rightly done is take many people out of tax altogether by increasing tax allowances. I believe that that has benefited up to 24 million.
All this must be seen in the context of deficit reduction. There have been exchanges across the Chamber about parties’ manifestos. I stood on a manifesto that was all about getting some sense back into the public finances and reducing the outrageous deficit that was bequeathed to the current Government. The Chancellor’s central strategy to deal with that deficit involves 80% of spending cuts and 20% of revenue raising. Given that the Opposition oppose virtually all the spending cuts, would reduce VAT, and are proposing not to freeze older people’s allowances, we can only conclude that they are not serious about reducing the deficit, and in that regard they are grossly out of step with public opinion.
Fiona O'Donnell: Perhaps the hon. Lady will make the progress to which she referred and will begin to deal with the issue that represents the substance of today’s debate. May I ask her whether she made representations to the Chancellor before the Budget, asking him to freeze the age-related allowance?
Margot James: I did not make representations to the Chancellor on a matter as technical as the one that we are discussing. Having dealt with that point, I will now proceed to discuss the freezing of older people’s allowances.
I consider the term “granny tax”, coined by the media and exploited by the Labour party, to be very pejorative. As was pointed out by my hon. Friend the Member for West Worcestershire (Harriett Baldwin), it is also very inaccurate, as 60% of those who will be subject to the freeze are men. Moreover, this is not a new tax, although some sections of the media presented it as such. I do not see how the freezing of an allowance can possibly constitute a new tax.