Parliamentary Debates House of Commons Official Report General Committees

PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES Public Bill Committee FINANCE BILL (Except clauses, 1, 3, 16, 183, 184 and 200 to 212, schedules 3 and 41 and certain new clauses and new schedules) Twelfth Sitting Thursday 6 June 2013 (Afternoon) CONTENTS SCHEDULE 21 agreed to. CLAUSES 48 to 50 agreed to. Adjourned till Tuesday 11 June at ten minutes past Nine o’clock. PUBLISHED BY AUTHORITY OF THE HOUSE OF COMMONS LONDON – THE STATIONERY OFFICE LIMITED £6·00 PBC (Bill 001) 2013 - 2014 Members who wish to have copies of the Official Report of Proceedings in General Committees sent to them are requested to give notice to that effect at the Vote Office. No proofs can be supplied. Corrigenda slips may be published with Bound Volume editions. Corrigenda that Members suggest should be clearly marked in a copy of the report—not telephoned—and must be received in the Editor’s Room, House of Commons, not later than Monday 10 June 2013 STRICT ADHERENCE TO THIS ARRANGEMENT WILL GREATLY FACILITATE THE PROMPT PUBLICATION OF THE BOUND VOLUMES OF PROCEEDINGS IN GENERAL COMMITTEES © Parliamentary Copyright House of Commons 2013 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 363 Public Bill Committee6 JUNE 2013 Finance Bill 364 The Committee consisted of the following Members: Chairs: †MR DAVID AMESS,MR DAVID CRAUSBY † Ashworth, Jonathan (Leicester South) (Lab) † Mearns, Ian (Gateshead) (Lab) † Baker, Steve (Wycombe) (Con) † Menzies, Mark (Fylde) (Con) Cryer, John (Leyton and Wanstead) (Lab) † Mills, Nigel (Amber Valley) (Con) † Doughty, Stephen (Cardiff South and Penarth) †Mowat,David(Warrington South) (Con) (Lab/Co-op) † Murray, Sheryll (South East Cornwall) (Con) † Duddridge, James (Rochford and Southend East) † Nash, Pamela (Airdrie and Shotts) (Lab) (Con) † Newmark, Mr Brooks (Braintree) (Con) Evans, Chris (Islwyn) (Lab/Co-op) O’Donnell, Fiona (East Lothian) (Lab) † Gauke, Mr David (Exchequer Secretary to the † Offord, Dr Matthew (Hendon) (Con) Treasury) Pearce, Teresa (Erith and Thamesmead) (Lab) † Gilmore, Sheila (Edinburgh East) (Lab) † Pugh, John (Southport) (LD) † Gummer, Ben (Ipswich) (Con) Qureshi, Yasmin (Bolton South East) (Lab) Hands, Greg (Chelsea and Fulham) (Con) Shannon, Jim (Strangford) (DUP) † Jamieson, Cathy (Kilmarnock and Loudoun) (Lab/ † Stephenson, Andrew (Pendle) (Con) Co-op) Stewart, Rory (Penrith and The Border) (Con) † Javid, Sajid (Economic Secretary to the Treasury) † Thornton, Mike (Eastleigh) (LD) Jones, Mr Marcus (Nuneaton) (Con) † Uppal, Paul (Wolverhampton South West) (Con) † Kwarteng, Kwasi (Spelthorne) (Con) Williams, Stephen (Bristol West) (LD) † Leslie, Chris (Nottingham East) (Lab/Co-op) McKinnell, Catherine (Newcastle upon Tyne North) Simon Patrick, Committee Clerk (Lab) † McDonald, Andy (Middlesbrough) (Lab) † attended the Committee 365 Public Bill CommitteeHOUSE OF COMMONS Finance Bill 366 adults over the age of 25 have been out of work for two Public Bill Committee years or more, which is a significant rise of going on for 150% in the past two years. Those individuals are Thursday 6 June 2013 struggling to find work and, having a gap in their employment service of 24 months or more, are finding it increasingly difficult to get back into work because (Afternoon) future employers are naturally asking, “Well, are you out of the habit of employment? What are your skill sets? How will you contribute to the organisation that [MR DAVID AMESS in the Chair] you want to work for?” Those individuals are often capable of making contributions to organisations; it is Finance Bill just that they have not been able to find work for a long time. (Except clauses 1, 3, 16, 183, 184 and 200 to 212, We therefore have to do something about that problem, schedules 3 and 41 and certain new clauses and new which is a matter of national significance as well as an schedules) important part of tackling the social security costs Schedule 21 agreed to. facing the country. The welfare bill has risen significantly under this Government, as the costs of economic failure have mounted higher and higher, so it is time that we Clause 48 took a proper rigorous approach towards enabling people to get off benefit and back into work—not by means of ANNUAL ALLOWANCE: NEW ANNUAL ALLOWANCE FOR the ineffective, worse-than-useless Work programme that THE TAX YEAR 2014-15 AND SUBSEQUENT TAX YEARS the Government have put together. That scheme underperforms the norm that might have existed had 2pm there been no job enhancement schemes whatever. Barely more than 2% of those going through the Work programme Chris Leslie (Nottingham East) (Lab/Co-op): I beg to have found sustained employment as a result of their move amendment 14, in clause 48, page 22, line 33, at encounter with it. That is just not good enough. The end add— Government clearly should have retained the future ‘(3) The Treasury shall publish a review within six months of jobs fund: the previous Administration pursued a scheme Royal Assent of the impact of restricting or reducing exemptions that brought £7,000 of net benefit to the Exchequer for from income tax of employee contributions to pension schemes at the additional rate. The review shall assess the impact that every job it created. alternative uses for revenues currently committed to pensions tax reliefs and exemptions for the additional rate of income tax Sheila Gilmore (Edinburgh East) (Lab): The future could have on job creation for the long-term unemployed.’. jobs fund was abolished on the basis of statements that it was not working and therefore should be abolished. The Chair: With this it will be convenient to discuss Was it not disgraceful that that was done before the clause stand part. outcome of the evaluation, which told a different story? Chris Leslie: I hope that you had a good lunch break, Chris Leslie: It was the Government’s haste on coming Mr Amess. I know that members of the Committee feel to office, without looking at the evidence, that got them that it went quickly, but here we are again—as though into much of the trouble they find themselves in today. we had never left. The amendment focuses on the long-term unemployed The amendment would change the provisions with because £1 billion could be generated by returning to a regard to the Government’s approach to tax relief and 20% basic rate tax relief for those on the additional rate pensions allowances. It focuses in particular on an issue who have high earnings of £150,000 or more. With that with which many hon. Members will be familiar—namely, money, we could provide a jobs guarantee for all those the Government’s bizarre decision to allow a more who have been unemployed for two years or more. If generous relief arrangement for those who earn more that significant achievement was recorded, the net costs than £150,000 a year. Under our amendment, the Treasury could, over time, be reduced considerably. Indeed, there would undertake a review, fairly soon after the legislation may be net benefits to the Exchequer, because individuals received Royal Assent, of the impact of restricting or who are unemployed and in receipt of benefits are a reducing exemptions from income tax of employee great cost to the Exchequer. If those people were in contributions to pension schemes at the additional rate— work, not only would savings be made in welfare costs, now at 45p not 50p, but that is a debate for another time. but revenue would be generated through the income tax We are discussing the additional rate today, and we paid to the Exchequer. Obvious social benefits flow think that a review should assess the impact that alternative from putting an emphasis on employment and uses for revenues that might be generated by reducing employability. I know that my hon. Friends are keenly the tax relief available to the wealthiest 1% in society in favour of that proposal. might have on other vital purposes of social benefit. In I do not understand—the Minister needs to explain particular, that £1 billion of revenue should be used to this—why he chose to show such generosity to the pay for a compulsory jobs guarantee for the long-term top-rate taxpayers who earn more than £150,000. What unemployed, which is the subject of our amendment. a perverse decision and strange choice to look at that The Government have a lamentable record on tax relief and say, “Let’s reverse that and move it back employment and unemployment, especially with respect up from 20p to 45p.” The Government’s decision was to the long-term employed. I gather that about 130,000 not even to move it to 40p, but to go to 45p. 367 Public Bill Committee6 JUNE 2013 Finance Bill 368 The Minister first needs to justify that decision, but The scheme, as we have costed it, could also cover the he also needs to explain why on earth he would not cost of 10 hours of training per week. We would want agree to the amendment. We have not even gone so far to work with the Work programme providers or Jobcentre as to suggest that he go for a particular scheme. We Plus to agree how that training could be most effective would merely like him to review properly what revenues to ensure that the person secured a permanent job at the could be generated and what help provided. end of the six-month temporary-job period. After 12 months of claiming jobseeker’s allowance under the current welfare to work system, most claimants Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co- over the age of 25 are referred by Jobcentre Plus to the op): Will my hon.

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