Topical Questions

Oral Answers to Questions — Treasury – in the House of Commons am 11:30 am ar 10 Mawrth 2015.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Ian Lavery Ian Lavery Llafur, Wansbeck 11:30, 10 Mawrth 2015

If he will make a statement on his departmental responsibilities.

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

Mr Speaker, I should say that the Chancellor of the Exchequer is at ECOFIN, making sure that Britain’s voice is heard in the European Union, and the Exchequer Secretary is unwell. I am sure that the whole House wishes her a speedy recovery.

The core purpose of the Treasury is to ensure the stability and prosperity of the economy.

Photo of Ian Lavery Ian Lavery Llafur, Wansbeck

Will the Chief Secretary confirm that the Treasury has had discussions with the Department for Business, Innovation and Skills and the Department of Energy and Climate Change with regard to UK Coal’s application for state aid for the British coal industry? What stage are the discussions actually at?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

It would be wrong for me to go into the ongoing discussions between BIS and other Departments and the industry. However, I can certainly say that I am aware of the issues that the industry is experiencing, and a discussion on that subject is going on with the Government.

Photo of Andrew Griffiths Andrew Griffiths Ceidwadwyr, Burton

Under the previous Labour Government, thousands of pubs closed and the brewing industry was taxed to the point of extinction. The Campaign for Real Ale now says that the Chancellor has saved 1,050 pubs, sold 75 million extra pints and has been the saviour of Britain’s brewing industry. Does the Chief Secretary agree that this Government have been positive for beer and pubs, and will he urge the Chancellor to keep on supporting our breweries?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

This Government have undoubtedly been positive for beer and pubs. Many hon. Members, including my hon. Friend Greg Mulholland, have campaigned on this issue. It is of course for the Chancellor to announce the Government’s decisions in this respect—I am sure that he has not pulled all those pints himself—but it is certainly the case that the beer and pub industry is stronger in this country, as part of a stronger economy, because of the decisions that this coalition Government have so far made.

Photo of Mary Glindon Mary Glindon Llafur, North Tyneside

Do the Government expect operating oil companies in receipt of tax concessions to develop contract strategies to enable UK fabricating yards to participate in large contracts with the potential to support thousands of jobs across the whole country?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

If the hon. Lady has specific issues in mind, I would gladly engage in further discussion with her, but the steps this Government have taken—including the establishment of enterprise zones in many areas where there are fabrication yards, and measures such as electricity market reform to get offshore wind and other such production going in the UK—all support the objective that she describes and which I share. If she has further ideas on how we can pursue that, I would gladly hear them.

Photo of Martin Vickers Martin Vickers Ceidwadwyr, Cleethorpes

The Chancellor recently highlighted the major part that my Cleethorpes constituency and the Humber estuary will play in the growing northern economy. However, much depends on continued investment in transport infrastructure. Will the Minister assure me and my constituents that that will continue as a high priority?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I certainly can. In the final Treasury questions of this Parliament it is worth reflecting on the fact that, despite the tough economic decisions we have had to make, this country is making the largest investment in our rail network since Victorian times and the largest investment in our road network since the 1970s, and we have a programme to roll out superfast broadband across the entire country. Those things will leave our economy with a stronger long-term growth potential, as well as having given us the best growth rates in the European Union at the moment.

Photo of Andy McDonald Andy McDonald Llafur, Middlesbrough

Is it not the case that those earning more than £1 million a year have benefited from an average tax cut of up to £100,000 a year in this Parliament? Does that not illustrate that, as ever under the Tories, the mega-rich get richer and the poor get poorer—and that this time they have been aided and abetted by the Liberal Democrats?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

It is this Government who have dealt with disguised remuneration by which loans were never repaid, benefiting the highest earners. It is this Government who have increased the rates of stamp duty land tax on high-end properties and ensured that they are properly enforced. It is under this Government that capital gains tax has gone up so that cleaners do not pay a higher rate of tax than hedge fund managers. It is this Government who have ensured that those with the broadest shoulders bear the greatest burden, as the Institute for Fiscal Studies confirmed last week.

Photo of Alistair Burt Alistair Burt Ceidwadwyr, North East Bedfordshire

Is my hon. Friend the Economic Secretary aware that in my rural constituency, businesses regard the words “long-term economic plan” with the same degree of comfort and familiarity as evensong in an Anglican church? Will she be good enough to give an assurance that, following the election, those words and the benefits that they bring will continue, not least through the expansion of broadband which is so important for rural business?

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

It sounds as though evensong in my right hon. Friend’s constituency is a fabulous occurrence, and hopefully not just on a Sunday. He is right to point out that this Government have sought to ensure that the benefits of the economic plan are felt right across the country and that the growth is balanced, with all three major sectors—services, construction and manufacturing —growing by 2.5% or more for the first time since records began in 1990.

Photo of Nia Griffith Nia Griffith Shadow Minister (Wales)

We all want to see an end to big companies wriggling out of tax by offshoring profits, but what assessment has the Minister made of the impact on kitchen table digital industries, such as the sale of knitting patterns, of the way in which HMRC has implemented the new EU rules on VAT being collected in the country of sale, and what can he do about it?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

Those are EU rules. It was the previous Government who signed up to the principle of changing the way in which the VAT system worked, and they were right to do so. This Government have taken two measures to try to mitigate the impact on some smaller businesses. None the less, without the support of other member states, we are still faced with a change in the rules.

Photo of Sarah Newton Sarah Newton Ceidwadwyr, Truro and Falmouth

Under this Government, food and drink manufacturing is a great British success story. However, our dairy farmers are being badly affected by volatile global markets. Will the Financial Secretary look favourably on proposals to implement tax averaging reforms, such as those in Ireland, to help these essential producers who contribute so much to our rural economies?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

I am grateful to my hon. Friend for her question; I shall take it as a Budget representation. I am sure she will understand that I cannot say any more about it at this point, other than to thank her. She has been vigorous in putting forward that case.

Photo of William Bain William Bain Llafur, Glasgow North East

For hard-pressed taxpayers, the real test of whether the Government are committed to cracking down on tax evasion and avoidance will be whether this month’s Finance Bill contains legal penalties for breach of the general anti-abuse rule. Will the Financial Secretary tell us whether those will feature in the Finance Bill—yes or no?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

The hon. Gentleman will have to wait for the Finance Bill to be published and to hear the Budget statement next week. He should reflect on his party’s record in office on these matters. Frankly, when the coalition Government came to office, we inherited a tax system like a Swiss cheese: it was so full of holes that tax was leaking all over the place. We have plugged a lot of those holes and there is more work to be done, but I do not think that he should give us any lectures.

Photo of Greg Mulholland Greg Mulholland Democratiaid Rhyddfrydol, Leeds North West

I am sure my right hon. Friend will welcome the report by the Electrification Task Force, which is chaired by Andrew Jones, and praise its work. The report said that in tier 1 the Harrogate-Leeds-York line should be prioritised, but does the Minister agree that we must also put in the 1.1 mile of track to connect Yorkshire’s Leeds Bradford airport?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I congratulate Andrew Jones and my hon. Friend on the their work, and I met them recently to discuss it. There is a strong case for investment in the Harrogate-Leeds-York line and in the rail link to the airport that my hon. Friend describes. Ensuring that degree of connectivity for one of the fastest growing airports in the country, which has huge potential for growth, could also take off the roads the traffic caused by people travelling to other airports in the country. We shall be considering the matter carefully.

Photo of Kelvin Hopkins Kelvin Hopkins Llafur, Luton North

The Minister will have noticed the substantial depreciation of the euro in recent times, which is bound to cause damage to the British economy. When will the Government take the exchange rate seriously and seek to secure an appropriate exchange rate for sterling?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

We take seriously the need for this country to have a set of policies that ensure the long-term health and growth of the UK economy, and the appropriate mix of fiscal policy, monetary policy and long-term investment. That is why we have the fastest growth in the United Kingdom of any advanced economy, and why there are now more than 2 million more people in work in the private sector than there were in 2010. That is a record I am proud of, and the hon. Gentleman should congratulate the Government on it.

Photo of John Glen John Glen Ceidwadwyr, Salisbury

When considering the allocation of LIBOR fines, will Treasury Ministers consider carefully the submission of Alabaré Christian Care in my constituency? It is seeking to construct a new veterans village in Wilton that will be transformational for veterans across Wiltshire.

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

I am grateful to my hon. Friend for that question. As he will know, the LIBOR fines imposed on banks for the appalling rigging of LIBOR are being used for mainly military charities, and a few other ideas have been put forward. I shall bear his remarks in mind and mention them to the Chancellor.

Photo of John Cryer John Cryer Llafur, Leyton and Wanstead

Further to Question 8, what measures is the Chief Secretary taking to tackle the activities of payroll and umbrella companies that promote bogus self-employment which in turn fuels widespread tax evasion?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

We have already announced measures to deal with intermediaries, both offshore and onshore. As the hon. Gentleman will know, a consultation on the issue is taking place at the moment, and it is important to ensure that companies cannot put in place artificial arrangements that are designed to reduce their tax bill and often have the consequence of removing important employment rights from workers. We continue to take that matter incredibly seriously.

Photo of Neil Carmichael Neil Carmichael Ceidwadwyr, Stroud

Does the Chief Secretary agree that one key aspect of the long-term economic plan is investment in skills, and will he reassure the House that the Government will carry on doing that?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

Yes I can. As this is national apprenticeship week it is worth reflecting on the fact that in this Parliament we have created more than 2 million more apprenticeships. That is a great achievement of this Government and has helped to ensure that young people have the skills they need to succeed in today’s economy. From my perspective that will continue to be a priority in the next Parliament.

Photo of Emma Lewell-Buck Emma Lewell-Buck Llafur, South Shields

To follow up the question from my hon. Friend John Cryer, it appeared from recent written answers that the Government are leaving open loopholes that see workers lose hundreds of pounds a month from rip-off umbrella companies. Why is that?


I would respectfully point out that compliant PAYE umbrella companies do not 'rip off' workers; they are employers like any other and they offer Statutory entitlements to workers who would otherwise have no rights as they would...

Cyflwynwyd gan Lisa Keeble Continue reading

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

As I said, we are consulting on that matter and have already taken considerable action to deal with intermediaries. I am sure that more will be said about the issue in due course.

Photo of Duncan Hames Duncan Hames Democratiaid Rhyddfrydol, Chippenham

Youth unemployment in my constituency has halved under this Government, and the Chief Secretary met some of the young people in new jobs at Anthony Best Dynamics in Bradford on Avon last year. Will he or the Chancellor accept an invitation to accompany me to one of the advanced manufacturing businesses in Chippenham which, with the support of the relevant Government programmes, can extend many more opportunities by creating jobs in 21st-century products in Chippenham?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I gladly accept the invitation, although time is limited. As my hon. Friend said, through visiting Anthony Best Dynamics I have seen precisely the benefits that apprenticeships can provide for young people wanting to get highly skilled jobs in the technology companies that are creating very high value added for the UK economy. The work that he has done in his constituency to promote businesses taking on apprentices is an example to the entire House.

Photo of Dennis Skinner Dennis Skinner Llafur, Bolsover

Why was the Chief Secretary to the Treasury so discreet about the application for state aid for the three remaining deep mine pits in Britain? Is he aware that in February 2014 the Government took £700 million out of the mineworkers’ pension fund for themselves? That kind of money in state aid could save those three pits so that they could exhaust their reserves. Now come on—tell us what’s happening!

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I am not going to change the answer I gave to the earlier question. I appreciate the sensitivity of these matters, and I would say that this Government have taken steps, wherever we can, to support that particular industry. I am not sure that it would be appropriate for me to comment further.

Photo of Oliver Heald Oliver Heald Ceidwadwyr, North East Hertfordshire

The Financial Secretary to the Treasury will be aware that Hertfordshire is a prosperous and successful county. However, it had reached the point at which growth was being compromised because the A1M was not being widened between Stevenage and Welwyn. That work has now been announced but, for the future, are the Government satisfied that they are planning such infrastructure projects far enough ahead to enable us to maintain the kind of strong economic growth that we have at the moment as a result of the long-term economic plan?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

I am grateful to my hon. and learned Friend and fellow Hertfordshire Member of Parliament. He is absolutely right to highlight that issue. As my right hon. Friend the Chief Secretary to the Treasury said earlier, we have in place a pipeline of road building and train improvements, the like of which we have not seen for many years. All of that will benefit Hertfordshire in particular and the United Kingdom as a whole.