Rachel Reeves
MP for Leeds West and Pudsey · Labour · United Kingdom
“I thank my hon. Friend for his question and his work on the Treasury Committee. On pensions reform, through the Mansion House accord and Sterling 20, we have got pension funds to commit to investing more in British businesses, both through British venture schemes and in British infrastructure.”
“I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries.”
“At a time of great global uncertainty, it is more important than ever that we deepen ties with our closest allies and biggest trading partners, whose values we share, and whose interests are bound to ours.”
“Today the Government have responded to the covid counter-fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud.”
“As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”.”
“I thank my hon. Friend for bringing the story of Darren and Nicole to this House. I hope that they and their children will benefit from the change I made to the two-child limit for universal credit, as well as from the rolling out of free breakfast clubs to all primary schools, and the introduction of free school meals for all children wh…”
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“Perhaps those 10,500 public sector workers can give their verdict at the ballot box. Yes, we do need a private sector recovery, but we will not achieve that by cutting the pay of the people who deliver our public services.”
“Nurses, teachers and police officers are already suffering the effects of the pay freeze and being hit by the sharp hike in pension contributions, and like everyone else they are suffering the effects of the Government’s recession, unfair tax rises and cuts. Now, the Chancellor is threatening to impose policies that for many people in many parts of the country would mean real-terms cuts in their income, continuing year after year. That would force them to pay the price for the Government’s economic failures. The millions of workers who are keeping our public services going in difficult times, the majority of them women on modest wages, deserve better than that.”
“It reports that 84% of its members “considered that the number of pay bands was appropriate to reflect local labour market conditions; only 7% thought this was not the case.” The National Governors Association reports that it is “not aware of any evidence that suggests making pay locally responsive would improve recruitment and retention.” It points out: “Low cost of living indices tend…to be associated with social deprivation; these areas may also…have difficulty attracting the best staff… As the Government is rightly concerned to narrow the attainment gap between those children from disadvantaged backgrounds and those who are not, bringing teachers’ salaries in line with local market conditions…would possibly be counterproductive and create recruitment difficulties that do not currently exist.” The evidence is clear, and so are the views of the experts, but the Chancellor’s posturing has created real worries for public service workers around the country.”
“Getting rewards wrong could have a significant impact on the quality of patient care and safety.” The National Employers’ Organisation for School Teachers states that “the existing four national zones, plus the flexibility to pay recruitment and retention supplements…provide an appropriate balance between national determination and local flexibility…the existing framework provides a reasonable level of autonomy to set pay”.”
“I thank my hon. Friend for that point and look forward to hearing what the Minister has to say in response. As well as the business people and other experts whom I have quoted, the key stakeholders have made their views clear. Not just the trade unions but employers and independent experts have expressed concerns. For example, NHS Employers notes that employers already have “the option to pay recruitment and retention premia”— that is related to the point made by the hon. Member for Finchley and Golders Green (Mike Freer)— “to address…specific labour market issues.” It states that a move to local pay bargaining would “raise issues of local capacity, increase administration costs and risk pay inflation as employers compete directly for staff on pay.”
“Trying to make public sector workers in hard-hit parts of the country the scapegoats for our economic problems is disreputable and divisive, and it is a distraction from the task to which the Government should be giving their full attention—a plan for jobs and growth that can get us out of the recession they have got us into.”
“Given that the policies have such big implications for the public purse, especially as anticipated costs go up because of the extra bureaucracy, I would have thought the Chief Secretary had a clear interest in them. I suggest that Ministers take this opportunity to call a halt to this exercise, end the uncertainty and confusion and put people’s minds at rest. They did that for charities, churches and caravans, and even for pasties. As the Prime Minister has said: “When you’ve got something wrong, there are two things you can do in government: you can plough on regardless, or you can say, ‘No, we’re going to listen, we’re going to change it’”. I therefore hope the Minister listens to what Members say in today’s debate and changes course before the Government get into even greater difficulty.”
“I do not think that the Minister wants to cut their pay. Does he think that teachers in Horsham should be paid more than those in Leeds West?”
“(Urgent Question) : To ask the Chief Secretary to the Treasury to make a statement on the changes that the Treasury has made to the Budget, which was presented to this House on 21 March 2012.”
“The mistakes that are still in the Budget are, however, the worst ones of all: a tax cut for millionaires while asking millions to pay more, and no plan for the jobs and growth that we desperately need to get our economy back on track and our deficit down. As the Minister and his colleagues are making such a virtue of listening and of their readiness to change course and make the occasional U-turn, perhaps now they will listen—to the millions of pensioners hit by the granny tax; to the millions of families hit by cuts to their tax credits; to the 1 million young people out of work; to the businesses struggling to break even; and to everyone in this country suffering from the double-dip recession made in Downing street and crying out— [ Interruption. ]”
“This is a Government who do not like to be held to account for their mistakes. The Minister has tried to make a virtue out of the Government’s abandonment of policies that prove to be unpopular and unworkable by saying that they are listening. However, failing to do the necessary work on a policy before announcing it and then sneaking out a reversal when they hoped no one was looking is not consultation—it is total incompetence. Is it not the truth that this Government were so desperate for money-making measures that they took from whomever they thought they could, hoping to get away with it? The result: a total and utter shambles of a Budget.”
“I thank the Minister for his answer, but regret the absence of both the Chancellor and the Chief Secretary to explain this series of U-turns. This statement leaves a number of questions unanswered. On 16 April, the Exchequer Secretary told the House: “The same approach should apply to mobile caravans as to static, non-residential caravans, and to a hot pie served in a fish and shop and one served in a bakery.” —[ Official Report , 16 April 2012; Vol. 543, c. 130.] On 12 April, in relation to the proposed cap on income tax relief for charitable donations, he said: “The policy that we’ve announced is a sensible one.” What new evidence has come to light since then and during the recess that has led the Government to change their mind? The reality is that the facts have not changed.”
“Given the number of U-turns that the Government have made in the past two weeks, it is difficult to know where to start. Will they now change course on the biggest mistakes in the Budget—cutting tax credits for working families, the granny tax and cutting tax for millionaires while asking ordinary people to pay more? The country is crying out for the Government to change course and to get a grip on their policies, which dug us into this hole and this recession.”
“In conclusion, the Government need to ensure value for money for every pound of taxpayer money spent, especially at a time of wage restraint for nurses, teachers and police, and huge cuts in the number of people working in the public sector, so the Opposition welcome the Chief Secretary’s commitment to rein in the avoidance of tax, but I hope this will apply to all those who are paid by the taxpayer, and that there will be genuine transparency in pay and in any exceptions to the rules set out today.”
“Where these arrangements are disallowed for current or future appointees, can the Chief Secretary give us his assurance that their salaries will not rise to compensate them for the loss of net income that may result? Can the Chief Secretary confirm that in accordance with previous commitments given on transparency and accountability, all those covered by the review whose earnings exceed £150,000 will be included in the Government’s annual list of people earning more than this figure? On the wider issue that the Chief Secretary mentioned—how IR35 laws are used to avoid tax beyond the public sector, which clearly needs to be addressed—can he guarantee that HMRC will have sufficient resources to monitor, manage and enforce the full payment of taxes at a time when it is being asked to absorb £2 billion-worth of cuts to its budget?”
“Will he give a clearer definition of the exceptional circumstances in which he will allow some public servants to continue receiving their salaries off the public sector payroll? Will he give an undertaking that those cases for which those exceptions have been made will be made public and that the exceptional reasons for them will be given? In future cases, will Departments be allowed to seek assurances about the tax affairs of public appointees with off-payroll arrangements, or will they be required to do so, as this morning’s news reports imply? If they will not be required to do so, why not? Why not have that duty to seek such assurances?”
“I think that taxpayers who have paid to rescue those banks would expect those employed by the banks to be paying their tax at the appropriate rate. Will the Chief Secretary conduct a review of the extent of such arrangements in the publicly owned banks? The findings also do not cover privatised or contracted-out services. Does the Chief Secretary think that those earning large incomes from taxpayer-funded contracts should be expected to pay their proper share of tax, and what steps will he take to ensure that that is happening? Thirdly, as regards what the Government will do next, the Chief Secretary has told us that there will be a new presumption that the most senior staff must be on the payroll. How does he define “the most senior staff” for those purposes?”
“In those cases where a public servant was not being paid on payroll, were the individuals concerned paying their proper share of income tax or national insurance? What was the cost to the Exchequer of those arrangements? Despite the emphasis on transparency, the findings presented today do not include local authorities, non-maintained schools, public broadcasting authorities or other publicly owned companies. Those areas account for a substantial portion of the public sector pay bill. When will the Chief Secretary come to the House with figures that cover those areas? It is not enough for him merely to encourage the publication of that information by others. The findings also do not cover publicly owned banks.”
“Secondly, on the subject of the extent of the problem and the scope of the review, will the Chief Secretary confirm how many such deals were signed off since February, when the affairs of the chief executive of the Student Loans Company came to light? Will he confirm that those individuals paid more than the Prime Minister will have been personally approved by the Chief Secretary? How many has he personally approved? If any did not come to him for approval, can he explain why? The review’s findings cover only people who earn more than £58,000, which is more than twice the average annual salary in this country. Will the Chief Secretary tell us why his review excluded anyone on less than £58,000 a year, and if he will return to the House with findings that include all such cases?”
“If his contract has been altered, has there been any cost to the taxpayer in doing so? The Government committed to publishing details of all public servants paid more than £150,000, yet the chief executive of the Student Loans Company was not on the list published in 2011 despite, as we know, earning £182,000 and despite the fact that his predecessor was listed. Will the Chief Secretary explain why the chief executive’s name was not on that list and can he tell us if any other public servants paid more than £150,000 have not been listed so far and whether they will be listed in the 2012 publication?”
“First, on the question of the chief executive of the Student Loans Company, we now know that he was appointed at a salary significantly higher than that of his predecessor and that he potentially avoided paying around £42,000 annually in tax, an amount almost twice the average public sector salary. Will the Chief Secretary tell us which members of the Government agreed to the arrangement made with the chief executive of the Student Loans Company and which members of the Government were aware of the arrangements before the matter came to the public attention in February? Have changes been made to his payment arrangements since then and can we be assured that he is now paying his full share of income tax and national insurance? If not, when can we have that assurance?”
“The vast majority of working people in this country have no choice over how or whether to pay the tax that they owe and they will feel that those who benefit from the highest public sector salaries have a special responsibility to make their proper contribution to the funding of the public services on which we all rely and to which they owe their generous salaries. We should all be clear that if the taxpayer is paying someone a living, particularly a better living than the vast majority of taxpayers enjoy, that person has a duty to pay their fair share of tax and the Government have a duty to ensure that they do so. The statement is a valuable step towards greater transparency and accountability and we welcome that, but I have a number of questions that I hope the Chief Secretary can answer today.”
“I thank the Chief Secretary for his statement and for providing advance notice of it. We welcome this review of the pay and tax arrangements of senior public servants. At a time when ordinary families and businesses are bearing the brunt of the recession that this Government have created and at a time when more than 700,000 jobs in the public sector are being cut while ordinary public service workers who keep our NHS, schools and police services running have had their pay frozen and their pension contributions increased, people will be shocked that more than 2,000 senior public servants, many earning several times the average public sector wage, have been paid in a way that allows them to avoid paying their fair share of tax, and that 1,200 of these deals have been done by the present Government in the past two years.”
“This has been a valuable debate on Her Majesty’s Gracious Speech, with 44 speeches from the Back Benches, which reflects the concerns raised in all our constituencies about jobs, business and growth. We heard 26 speeches from the Opposition and 18 from Government Members. My hon. Friend the Member for Wansbeck (Ian Lavery) said about 20 minutes ago that at this stage in the evening it is difficult to say anything new, given that so many people have made the points already. We have heard several thoughtful and provoking interventions. We even had a song from my hon. Friend the Member for Blyth Valley (Mr Campbell), which livened up our afternoon.”
“I am not surprised that the Foreign Secretary’s comments have been met with incredulity by small business owners, who are working every hour of the day to keep their books in balance.”
“The modest measures that the Government have claimed will help struggling families and businesses are turning out, under examination, to be woefully inadequate to the task with which we are confronted. Perhaps it is because, as the Foreign Secretary said yesterday, the Government think that it is just not their responsibility and that the reasons for the recession are to be found not in their own failure, but in the fact that the rest of the country is just not working hard enough. That is a view backed up by the Business Secretary, who referred to the Foreign Secretary’s remarks as “commercial diplomacy”, and by the hon. Member for Salisbury (John Glen), who criticised businesses for their ill-advised criticism of Government policy.”
“Friends the Members for Llanelli (Nia Griffith), for Houghton and Sunderland South (Bridget Phillipson), for Newcastle upon Tyne North (Catherine McKinnell) and for Edinburgh East (Sheila Gilmore)—on the human stories behind the raw statistics, sound and successful businesses shutting up shop because no one is buying, families facing rising bills, rents and mortgage payments while wages are not keeping pace, school leavers and university graduates losing hope as months on the dole turn into years. However, the Government’s legislative programme seems utterly disconnected from those realities. There was no mention of the new jobs that we need, and nothing to turn round the crisis of more than 1 million young people being out of work.”
“Our economy is in recession—the first double-dip in four decades—with unemployment rates too high and business investment too low, although to listen to some speeches from Government Members we would think that the economy was booming, with businesses spoilt for choice over whether to invest. In contrast, we have heard excellent speeches from Members on both sides of the House about the concerns raised by our constituents. We heard particularly powerful contributions from my hon.”
“I am happy to take an intervention if my hon. Friend wants. The Chief Secretary to the Treasury and the Government have serious questions to answer after this debate, because there remains concern about the stewardship of the economy. As my hon. Friends said, particularly my hon. Friends the Members for Bethnal Green and Bow (Rushanara Ali) and for Huddersfield (Mr Sheerman), my right hon. Friend the Member for Birkenhead (Mr Field) and my hon. Friend the Member for City of Durham (Roberta Blackman-Woods), there is a lack of vision, leadership and imagination in the Queen’s Speech on the economy and business. The hon. Member for Cleethorpes (Martin Vickers), too, said that the Government needed a new narrative. The facts are undisputed.”
“It is a waste of talent and of life chances that will cost our economy and our Exchequer for decades to come, as the commission headed by my right hon. Friend the Member for South Shields (David Miliband) set out so lucidly in its report. There is no more egregious an example of Government mis-spending than the billions that they are spending on benefits—the cost of their own economic failure. They are now borrowing £150 billion more to cover rising benefit bills and the loss of tax revenues as businesses go out of business.”
“Youth unemployment is at more than 1 million—an issue raised in today’s debate by my hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe) and for Birmingham, Erdington (Jack Dromey) and by my right hon. Friend the Member for Knowsley (Mr Howarth). The number of 18 to 24-year-olds claiming dole for more than six months has gone up by 115% over the past year. The number of those claiming for more than 12 months is up by 213%. In the Prime Minister’s latest desperate dissimulation, the austerity he is inflicting on the country is now called simple efficiency. However, I do not see anything efficient about presiding over rising youth unemployment, as my hon. Friend the Member for Walthamstow (Stella Creasy) also pointed out. There is surely no greater waste than the waste of youth unemployment.”
“With the eurozone now teetering on the brink of another downward spiral, the real worry is that we have yet to feel the full effect on the UK of the economic turbulence on the continent. The Business Secretary is right to warn that the worst may be yet to come, which makes it all the more serious a failure to have put the UK economy in such a weak position to withstand further deteriorations in financial market confidence and export demand. As my right hon. Friend the shadow Chancellor warned over a year ago, when a hurricane is brewing, we do not rip out the foundations of the house, but that is exactly what the Government have done, and the hurricane is now gathering force. Let us look at what this recession means for jobs and business in our country. The latest jobs figures show that unemployment remains at a 17-year high.”
“They have tried to blame the instability of the eurozone, but I point them to the European Commission’s spring forecast, which says of the UK economy: “The main cause of weakness in 2011 was household consumption, which contracted for four consecutive quarters…Investment, which had been expected to contribute positively to growth, actually fell by 0.6% in the final quarter of 2011 and by 1.2% over the year.” Indeed, contrary to Government claims that storm winds from the continent blew their plan off course, the European Commission confirms that for the UK: “Net exports were the main source of growth in 2011, contributing 1% to GDP growth.” We should therefore be in no doubt and under no illusion: this is a recession made in Downing street.”
“Let us remind ourselves—for the Government seem to be in denial—that the backdrop to this debate is the first double-dip recession that the UK has experienced in 37 years, an outcome that the Government assured us would not happen. However, less than two years after boasting that the British economy was “out of the danger zone” —[ Official Report , 15 December 2010; Vol. 520, c. 901] and was now a “safe haven” from the storms raging through the global economy, the Government have succeeded in steering us into a recession of their own making.”
“I am sure that businesses welcome the fact that sterling has depreciated, which has made it easier to export, but that is because of the Bank of England’s decision to cut interest rates, under the last Government, and quantitative easing, also under the last Government. We have seen another example of how out of touch Government Members seem to be with the reality facing businesses, families and young people. School leavers and graduates are filling out dozens of job applications week after week—should they be working harder? Millions of people who would work extra hours if the work was available; families feeling more squeezed by the month, worried sick about how to make ends meet—is it their fault that we are back in recession? Should they be working harder?”
“There is no sign that the Government understand the scale of the task before them, and nothing to reassure the businesses and working people of this country that we have a Government who are up to the job that now confronts us.”
“This is a Government whose idea of a growth strategy is giving a tax break to millionaires, while cutting tax credits for those working for modest wages. Having choked off the recovery and taken our economy back into recession, the Government who first blamed the snow, then the royal wedding and the eurozone now seem to be blame everyone but themselves for not working harder. The truth is that it is this Government who need to work harder. It is time the Prime Minister started taking responsibility for the recession he has created. It is time the Prime Minister started taking responsibility for turning our economy around. Yet there is precious little in this legislative programme to suggest that the lessons have been learned, and precious little to stop the economy from sinking further into recession.”
“While this Government state that the priorities of the Queen’s Speech are economic growth, deficit reduction and help for businesses, there is nothing to boost bank lending to small businesses, nothing to help hard-pressed families and nothing to turn around the tragic rise in youth unemployment. In conclusion, we heard great claims for this legislative programme—a Queen’s Speech that was supposed to mark the re-launch of this coalition, a plan of action that the Prime Minster said was about supporting growth and business, and giving a helping hand to families and those he called the “strivers”. The reality is, however, that people are striving to find anything in this programme that lives up to the rhetoric.”
“Friends the Members for West Bromwich West (Mr Bailey) and for Stoke-on-Trent Central (Tristram Hunt) have said, why was there no Bill in the Queen’s Speech on higher education or on co-operatives? What do we get from this Government? Just the hope that something will turn up—a hope that their own inaction and inadequacy will spur the British people to greater efforts. This is a legislative programme that falls well short of what is needed. We need investment flowing into energy-efficient infrastructure and green technologies. Instead, we get a green investment bank that has nothing to invest. We need action to bring responsibility and restraint to the boardroom, ending unjustifiable pay packages that reward failure, but the Government’s proposals fall far short of what is needed.”
“Why have they refused to repeat the tax on bank bonuses, so that money squandered on bonuses by banks that are not doing their bit to get our economy growing could be clawed back and put to better use, funding 100,000 jobs for young unemployed people and the construction of 25,000 new and affordable homes? Why have the Government not taken the opportunity of this Queen’s Speech to announce legislation that could protect and improve the living standards of families feeling the squeeze—for example, by creating a more competitive energy market, with guaranteed low tariffs for 4 million people over the age of 75, by stopping train operators clobbering commuters with high fares, and by empowering consumers with new rights against rip-off surcharges by banks, airlines and pension providers? As my hon.”
“Why will the Government not implement a national insurance holiday for small firms taking on extra workers, to help businesses struggling to survive and young people desperate to get into work? Why will they not bring forward investment in vital infrastructure projects, so that we could create new jobs in the construction sector at the same time as securing our future economic strength? Why will the Government not reverse their damaging VAT rise? That would boost business and consumer confidence, and kick-start the growth that we need to get the deficit down.”
“I can tell him that the million people who have lost their jobs since he came to power do not need a text message telling them to keep their heads up. They need a real plan for jobs and growth, and a Government working night and day to find ways to help them to get by and to get on in life. This Government give the impression that there is nothing they can do, and that we should just resign ourselves to years of hardship while waiting for something to turn up, but the reality is that a Government who really cared could do so much more to make a difference to the lives of our constituents. Labour Members have made proposals that could help to turn our economy around, and that could help businesses struggling to break even and families struggling to make ends meet.”
“But the truth is that, whether they are revised up a decimal point or two, or down, the statistics only confirm what we should already know from talking to families, businesses and young people in our constituencies. Families and businesses desperately need the Government to get a grip and get us out of the deep hole that they have dug us into. Instead, we have a programme of Bills that lack any sense of urgency or, indeed, relevance to the reality of life for most people in this country right now. The Prime Minister and his Cabinet seem to be living in a parallel universe. Indeed, the only person whose employment prospects the Prime Minister seemed to care about was the head of News International.”
“In the last three months, we saw 4,303 insolvencies in England and Wales alone—an increase of 4.3% on the same period a year ago, and the highest figure since 2009. The lack of policies for growth were highlighted today in thoughtful contributions from my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and my hon. Friends the Members for Blyth Valley and for Wansbeck. The businesses that are staying afloat are doing so by battening down the hatches. The latest industrial production numbers show a further decline, and we now know that construction output fell by 4.8% in the first quarter of this year, suggesting that the initial estimates of first quarter GDP, if anything, understated the extent of the economy’s contraction.”
“I have already given way to the hon. Gentleman once this evening. Meanwhile, caught between the pincers of a squeeze on lending and horrendous trading conditions, more and more businesses are going under. The Government cannot create jobs, but, as hon. Members on both sides of the House have said, they can and should do more to create the right environment for job creation. That is what has been so lacking in the Budget and in the Queen’s Speech. Figures released by the Bank of England last month show that, in February, bank lending to companies fell by £4 billion—the sharpest drop for more than two years. Meanwhile, the Nationwide consumer confidence index fell by nine points last month. The inevitable result is that insolvencies are rising and rising.”
“Can the Minister tell us how many young people have now been out of work for more than six months, and how that compares with the figure of a year ago?”
“The Minister failed to answer my question, so let me tell the House that 170,000 young people have been out of work for more than six months. That is an increase of 114% since just a year ago. Does the Minister think it is fair that families with children are being asked to pay a higher price for deficit reduction than the banks, and if not, will he reconsider reinstating the bank bonus tax to support young people back to work—especially as his Budget has given a tax cut worth £40,000 to 14,000 millionaires?”
“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.”
“It is a privilege to serve under your chairmanship, Ms Primarolo. 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 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.”
“This is a permanent freeze, and the allowance is being abolished entirely for people coming up to retirement next year, so it is very different from a one-year freeze.”