Topical Questions

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of Ronnie Campbell Ronnie Campbell Labour, Blyth Valley 11:30 am, 5th November 2013

If he will make a statement on his departmental responsibilities.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

The core purpose of the Treasury is to ensure the stability and prosperity of the economy. Today I can also announce another step in the fight against tax evasion. This afternoon we will sign a tax information-sharing agreement with the Cayman Islands—the first ever with an overseas territory. As a result, information on UK taxpayers held in the Cayman Islands will automatically be provided to Her Majesty’s Revenue and Customs, which will use it to collect the tax that is due.

Photo of Ronnie Campbell Ronnie Campbell Labour, Blyth Valley

Is it still the Chancellor’s intention to withdraw jobseeker’s allowance from all young people under the age of 25?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

That is not part of the Government’s programme. We are seeking to help young people into work through the Work programme and the Youth Contract. The good news is that the youth claimant count has fallen by many tens of thousands. I would have thought that the hon. Gentleman would use this opportunity to get up and point out that unemployment has fallen in his constituency over the last year, and there are—[Interruption.] Unemployment has fallen in his constituency, and every job created is one that he should be celebrating. He should remind his constituents of the enormous damage done to the north-east economy by the previous Labour Government.

Photo of Glyn Davies Glyn Davies Conservative, Montgomeryshire

The most important financial issue in the lives of many young families is mortgage interest. Does my right hon. Friend the Chancellor agree that the best way—indeed, the only way—to keep mortgage rates low is to stick with the Government’s economic plan of cutting the deficit?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I completely agree with my hon. Friend. Of course, one of the consequences of the higher borrowing that the Labour party is advocating would be not just higher taxes, but higher interest rates, which would be absolutely disastrous for families. That is precisely why we have to stick with the economic plan that is delivering the recovery.

Photo of Edward Balls Edward Balls Shadow Chancellor of the Exchequer

I welcome the Economic Secretary and the shadow Financial Secretary to their new jobs, and let us not forget the former Treasury Whip, the Treasurer of Her Majesty’s Household, Greg Hands, who has finally got the promotion we have been urging him to get for three years.

Under this Chancellor’s watch, the UK is experiencing the slowest recovery for more than 100 years, and with prices, including energy prices, rising faster than wages, for millions of people this is no recovery at all. Yet from the Chancellor’s earlier answers to the Chair of the Treasury Committee, he seems to think he can get away with cutting energy bills by simply shifting the burden of his green levies on to the ordinary taxpayer.Let me ask the Chancellor—[Interruption.]

Photo of Edward Balls Edward Balls Shadow Chancellor of the Exchequer

Why will the Chancellor not agree with us and Sir John Major that it is the energy companies that are making the excess profits and that it is they, not the ordinary taxpayer, that should bear the burden?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

First, I join the right hon. Gentleman in welcoming the two hon. Ladies to their new Front-Bench positions, although I think he got the title wrong of his new shadow Exchequer Secretary. By the way, while I am at it, may I welcome the fact that the right hon. Gentleman did not move in the reshuffle, because he is exactly where we want him to be?

Perhaps one of these days the right hon. Gentleman will welcome the fact that GDP is increasing, that unemployment is coming down and that today we had the best services purchasing managers index since May 1997. I believe we should roll back some of the levies and charges that have been imposed on energy bills. I am not clear whether he agrees.

Photo of Edward Balls Edward Balls Shadow Chancellor of the Exchequer

After three years of flatlining, people are worse off because of this Chancellor of the Exchequer. As for ordinary people’s rising energy bills, he just does not give an EDF.

Is it not the case that, over the past year, energy prices in the euro area fell by 1.7% while in the UK they have risen by a staggering 7.7%? Simply switching green levies on to the taxpayer is giving with one hand and taking with the other. Why does this Chancellor always hit ordinary families while standing up for a powerful few?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

With questions like that, the right hon. Gentleman is never going to be npower, is he?

The truth is that the right hon. Gentleman created a situation in our economy whereby living standards were hit hard, because he destroyed jobs and economic prosperity. Like a bonfire on Guy Fawkes night, every single one of his economic predictions has gone up in smoke, and he has nothing credible or serious to say about the British economy.

Photo of Kwasi Kwarteng Kwasi Kwarteng Conservative, Spelthorne

Is it not true that the only way to improve considerably our standard of living is to focus on the economic situation of the country to boost growth and pay down debt?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I completely agree with my hon. Friend that unless we have a credibly economic plan to grow the economy, deal with public finances and support business rather than tax it, we will get the reaction the shadow Chancellor got from the CBI, whose members said that the hairs on the backs of their necks stood up as they listened to all the terrible things that a Labour Government would do to them. The truth is that we are fixing the economic mess the shadow Chancellor left behind, and that is the best way to improve people’s living standards.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

The Chancellor was warned that his cuts would choke off the growth that had returned to the UK economy when he took the job in 2010. Of course we welcome the fact that Britain is finally returning to growth, but does he not realise that if he had taken the advice of my right hon. Friend Ed Balls earlier, we would not have had three wasted years, the average working person would not be £1,500 worse off, and the talents and potential of 1 million young people would not have been laid to waste?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I remind the hon. Gentleman that the shadow Chancellor said that our economic policies would choke off the recovery in the spring of this year—the very moment when the recovery was under way. When will a Labour MP welcome the fact that our GDP has grown by 0.8% and unemployment is coming down? When will Labour acknowledge that it is our economic plan that is delivering that?

Photo of David Heath David Heath Liberal Democrat, Somerton and Frome

One of the frustrations of losing ministerial office is that one cannot see through the things that one started. Will the Chancellor look carefully at the recommendations of the independent future of farming review, which I commissioned, because it has made far-reaching suggestions for changes in taxation that will benefit rural areas?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I pay tribute to the work that my hon. Friend did in government. I will make it a personal priority to ensure that his review sees the light of day and is acted on.

Photo of Chris Ruane Chris Ruane Labour, Vale of Clwyd

Why has the number of the working poor doubled since the Chancellor took office?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

The key thing is that people are getting into work. That is another Labour MP who has not acknowledged the fact that unemployment has fallen in his constituency. When will Labour Members acknowledge that our economic plan is repairing the mess that they left behind?

Photo of Andrew Griffiths Andrew Griffiths Conservative, Burton

On behalf of brewers everywhere, I thank the Chancellor for being the man who scrapped Labour’s hated beer duty escalator and who cut beer duty for the first time since 1959. Last month saw the biggest growth in beer sales this century, with 1 million extra pints being sold and £60 million extra going to the Exchequer. I ask him to keep supporting Britain’s pubs and brewers.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

This is a case of teamwork, because my hon. Friend has led a brilliant campaign involving many Members of Parliament in support of the local pub industry in their constituencies and the brewing industry, which is so important in Burton. The work that he has done has been fantastic. It was thanks to his campaign, which drew the evidence to my attention, that we were able to take the action that he has welcomed.

Photo of Mary Glindon Mary Glindon Labour, North Tyneside

Will the Chancellor make a statement on why the decision has been taken to extend HMRC’s pilot of the new customer service model in the north-east by two months until the end of December?

Photo of David Gauke David Gauke The Exchequer Secretary

We want to look at the evidence further, so that seems to be a sensible approach; we want to see whether the model is working. The final decision has not been taken on whether to extend it. This is about improving the service for the people who need it most. We believe that that is an important objective.

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

As you know, Mr Speaker, I am of a nervous disposition. I was therefore alarmed this year—not three years ago—to hear predictions that 1 million jobs would be lost, there would be a decade of lost growth and the recovery would be choked off as a result of the Government’s plans. Will the Chancellor allay my fears and explain what has happened in the real world?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

My hon. Friend is right that there were a lot of predictions from the Opposition Dispatch Box. They said that there would be a decade of lost growth, but the economy is now growing and we have had the fastest growth in the G7 this year. They predicted that 1 million jobs would be lost, but 1.4 million jobs have been created in the private sector and unemployment is down. Above all, they advocated—indeed, they continue to advocate, because it was in the speech that the shadow Chancellor made yesterday—increased borrowing, which would lead to higher taxes and higher interest rates. The biggest threat to the British recovery is sitting right opposite me.

Photo of Margaret Ritchie Margaret Ritchie Shadow SDLP Spokesperson (Environment, Food and Rural Affairs), Shadow SDLP Spokesperson (Energy and Climate Change)

What progress has been made on the extension to the fuel duty rebate scheme, which is due for further implementation via a submission to the European Commission?

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

We have completed a call for evidence on that subject and have put forward an initial list of locations that meet the strict criteria that are required to make a successful application at the European level. Further work is needed to ensure that we have all the information that is necessary to submit the application. That will be the subject of a supplementary piece of work and we will submit the application early in the new year.

Photo of Stuart Andrew Stuart Andrew Conservative, Pudsey

I was delighted to welcome my right hon. Friend to Hainsworth mill in my constituency recently. Will he join me in welcoming the news that production output increased by 0.5% in the last quarter, and does he agree that that shows that British business is rising to the challenge of rebalancing the economy after an unsustainable decade under the Labour party?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I was very impressed by the work being done at Hainsworth mill, which is one of the oldest textile mills in Britain and has been going for a couple of hundred years. It is now exporting textiles from west Yorkshire to China, which shows that the British economy can achieve remarkable things if we get the investment and economic policy right. My hon. Friend is right: we must stick with the economic plan that is continuing to improve the situation in his constituency and across the country.

Photo of Meg Munn Meg Munn Labour, Sheffield, Heeley

Every newly created job in the private sector is very welcome, but will the Chancellor tell the House how many public sector jobs have been redesignated as private sector jobs in the past three years?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I am happy to write to the hon. Lady with that number. Let us be clear: the Labour party and the shadow Chancellor said it was a complete fantasy that private sector job creation would outstrip the loss of public sector jobs required by fiscal consolidation. That is complete nonsense and we have not yet had an apology from the shadow Chancellor.

Photo of Ian Swales Ian Swales Liberal Democrat, Redcar

Companies up and down the country have been investing in manufacturing capacity for the green infrastructure of tomorrow. Those in the north-east Energi Coast consortium have already invested £400 million. Will the Chancellor confirm the Government’s commitment to support the renewable energy industry?

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

I am grateful to my hon. Friend for the question, and I congratulate him on his new appointment in this House. I can reassure him on his point. We are, of course, looking at the range of support that exists in terms of people’s energy bills, but we will not compromise on our commitment to renewable energy and green infrastructure investment. That means we remain absolutely committed to the renewables obligations and the contracts for difference, and that will not change as part of this process.

Photo of Debbie Abrahams Debbie Abrahams Labour, Oldham East and Saddleworth

The Institute for Fiscal Studies estimates that more than 1 million more children will be living in poverty in 2020, which absolutely wipes out the number of those lifted out of poverty under the previous Labour Government.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

The best approach to lifting children out of poverty is to ensure that they live in working households. We now have the lowest number of workless households since records began, which is due to the achievements of my right hon. Friend the Secretary of State for Work and Pensions, and of the economic plan that is getting the parents of children into work.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

Given that the cost of the EU will double in this Parliament, and the huge current account deficit with the EU, does the Chancellor agree that our current economic relationship with the EU is wrong and that we should renegotiate?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I certainly agree that we need to reform the European Union so that our entire continent is not priced out of the global economy. We must also make reforms to the European Union, and Britain’s relationship with it, so that British businesses can thrive, compete and create jobs. I point out to my hon. Friend—he knows this anyway—that the cost of the European Union would have been much higher if my right hon. Friend the Prime Minister had not secured a very good deal. [Interruption.] Ed Balls says, “We did it,” but Labour gave up the rebate. The Prime Minister went to the EU battling for Britain and delivered for Britain.

Photo of Luciana Berger Luciana Berger Shadow Minister (Public Health)

Over the past six months more than 350,000 people, many of them in work, have accessed emergency food aid from a food bank. When will the Chancellor visit a food bank so that he can see for himself the impact of his cost-of-living crisis on hundreds of thousands of people across the country?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I have visited a food bank in Northwich in my constituency and seen the excellent work it does. I commend the volunteers at that food bank, and indeed across the whole food bank movement.

Several hon. Members:

rose—

Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee, Chair, International Development Committee

If Scotland chooses to vote for independence next September, how will handing over control of the Scottish economy to a foreign bank, namely the Bank of England, benefit Scotland’s economy?

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

My right hon. Friend makes an important point. It would be very foolish indeed for anyone to vote for independence on the basis that Scotland will keep the pound. It is highly unlikely that a currency union would be workable, and therefore highly unlikely that any euro-style arrangement for the UK would be in the best interests of either Scotland or the rest of the UK. The only way to be sure of keeping the pound is to keep the UK together.

Several hon. Members:

rose—