21:59 - The House divided: - Ayes: 299 / Noes: 243 - Question accordingly agreed to.
The Chief Secretary to the Treasury (Danny Alexander)
Let me begin by joining the shadow Financial Secretary in his congratulations to the hon. Member for Leeds West (Rachel Reeves) on the birth of her child, as I think will Members in all parts of the House.
The debate has been very well attended. I think that there were 46 Back-Bench speeches. It has also been very well considered and, at times, passionate. I thank Members on both sides of the House for their contributions.
My right hon. Friend the Secretary of State for Communities and Local Government opened the debate in his usual pugnacious style. He talked about planning, housing, mortgages and the help to buy scheme, which he described in some detail. He did not mention the announcement on zero-carbon homes, but my right hon. Friend the Member for Hazel Grove (Andrew Stunell) referred to it in detail.
There were contributions from Members representing all parts of the United Kingdom, and, I think, from all parties in the House except the Scottish National party. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards)—
Danny Alexander
Will the hon. Gentleman give me a moment? I am going to say something about him. He made some serious points about borrowing powers. As he knows, they are being considered in the light of the Silk commission recommendations.
Many Government Members celebrated both the reaching of the £10,000 income tax personal allowance and the reductions in fuel duty, which one or two Opposition Members also welcomed. I will not single out every contribution, but my hon. Friends the Members for Halesowen and Rowley Regis (James Morris) and for Mid Dorset and North Poole (Annette Brooke) spoke passionately about those subjects. They also mentioned housing, including the important role played by affordable housing in the Budget.
Danny Alexander
Will the hon. Gentleman just let me finish the point?
The hon. Members for Huddersfield (Mr Sheerman) and for Stalybridge and Hyde (Jonathan Reynolds) made passionate speeches about manufacturing. The hon. Member for Coventry South (Mr Cunningham) celebrated the presidency of George Bush, which was somewhat surprising. My hon. Friend the Member for Colchester (Sir Bob Russell) called for a tax on television rights relating to football matches, which is not a suggestion that I shall be following up immediately.
Now I will give way to the shadow Financial Secretary.
Chris Leslie
The Chief Secretary mentioned housing. May I ask him about the new homes subsidy? In yesterday’s Daily Telegraph, he was quoted as saying:
“I do not want to get into all the details.”
Has he decided tonight to rule out making that scheme available for second or third homes?
Danny Alexander
We have made it clear throughout that there is no intention that this scheme should work to the benefit of second-home owners, but as I said yesterday and as the Chancellor has said repeatedly, we will consult on the detail of the scheme to make sure it benefits those whom it needs to benefit.
There is a very serious problem in this country: many people, especially young couples, can afford the monthly repayments on their mortgage but cannot afford the large deposits that are now required by mortgage—
Danny Alexander
Sit down; I am going to press on. The help to buy scheme, in its several manifestations, is designed to provide support.
We heard no apology whatsoever from Opposition Front Benchers for the mess they got this country into when in government. That is what we were looking for from the shadow Secretary of State for Local Government and the shadow Financial Secretary.
There were contributions from a number of distinguished members of the—
Sheila Gilmore (Edinburgh East) (Lab)
What does the Chief Secretary have to say about the Financial Times editorial which said that the Budget offered too little to boost growth now?
Danny Alexander
I disagree with it, for reasons that I will come to. I will now make some progress.
The right hon. Member for Edinburgh South West (Mr Darling) made a characteristically thoughtful contribution to the debate. He has made it clear, not least through his leadership of the Better Together campaign but also in response to an intervention, that the Scottish National party is not being open about the scale of the problems that an independent Scotland would face.
It was not the presence on the Opposition Front Bench of members of the former Government that was most noticed last week. Many Members will have sensed a presence in the Chamber, and looking up they would have seen Lord Mandelson, a former member of the previous Government, looking down. Afterwards, he gave his views on the Budget. He said in a speech the following night:
“I can't quite remember which member of the government it was who claimed to have abolished boom and bust. Well, we abolished boom…The whole argument about whether we’re cutting too far and too fast, it’s in the past. It is rather predictable party political stuff from over the despatch box, and it is a bit tiring to the public.”
The shadow Chancellor would do well to take note. Lord Mandelson then said the following, which is particularly significant in the context of an earlier intervention:
“I don’t think you can really take a chance, I think the markets, whose confidence in us to pay back what we borrow—that confidence is the determining factor. If that was seriously damaged by a lurch in policy I think that would be quite a risk which I would not blame the chancellor for refusing to take.”
That is sage advice from a former member of the previous Government, which Opposition Front Benchers would do well to take.
Last week’s Budget sent a message to hard-working families in each and every constituency up and down the country: if people want to get on in life, this Government will support them. If, in the short term, people want more money back in their pockets, we are taking measures to help them. They will pay less to fill up their car; they will pay less for a pint of beer; and, most importantly, if they earn less than £10,000 they will soon pay absolutely nothing in income tax.
If, in the near future, Mr Speaker, a constituent of yours wants to own their own home, this Government are making that a very real possibility through low-deposit mortgages, through mortgage guarantees and through doubling the affordable homes guarantee programme. For those who, in the distant future, do not want their children or grandchildren to still be paying off this generation’s debts, we are taking the steps to ensure that they will not. We are reducing the structural deficit, creating a tax landscape for economic growth and building an infrastructure for the UK to compete in the global race.
This evening, I want to talk about the steps this Government have taken to build a stronger economy and a fairer society. We are putting our faith in the private sector to help us build that stronger economy. We believe that the best way to do that is to create the most competitive tax regime in the G20. Further reducing the rate of corporation tax, which we announced in this Budget, will not only send a clear message that Britain is open for business, but will increase the return on those businesses’ investments and incentivise economic growth. Meanwhile, our £2,000 employment allowance, welcomed on both sides of the House, will be a real help for small and medium-sized businesses that want to expand and to employ more staff.
The Government know that if we want to see growth we cannot, as our predecessors did so catastrophically, look to one industry or one city. Several Opposition Members mentioned the importance of manufacturing industry, but when in government Labour became over-dependent on one square mile, thanks to the shadow Chancellor’s prawn cocktail offensive. We know that for a stronger, more balanced economy, we need growth across different sectors, and we need growth up and down the country. That is why we are taking forward the measures from the Heseltine review; it is why my right hon. Friends the Business Secretary and the Deputy Prime Minister unveiled our aerospace investment in Bristol before the Budget; it is why we are supporting the asset management sector, which is so important, particularly to the Scottish economy and to Edinburgh; and it is why, as well as supporting renewables, we are developing proposals so that communities can benefit from any shale gas discovered in their area. It is right that local communities see the benefits of natural resources in their locality.
We also need to make sure that our industrial base is broad, as we have seen only too clearly the dangers of over-reliance on one specific sector. That is why my right hon. Friend the Business Secretary is overseeing £1.8 billion of funding to support strategies in 11 key sectors, working to ensure that our economy makes the most of its potential in life sciences, construction and many other areas. While we build this stronger economy, we are also making sure that we build a fairer society. The Labour party likes to portray itself as the party of taking from the rich and giving to the poor, but everyone who was paying income tax at the l0p rate and was then paying income tax at double that rate will soon, thanks to this Government, be paying no income tax at all. That policy comes straight from the Liberal Democrat manifesto to the pockets of millions of hard-working families up and down the country, thanks to this coalition Government.
Of course we recognise that, despite these actions, times are still difficult for many families up and down the country. For that reason, we have taken the decision to cancel this September’s fuel duty increase, which was baked into the public finances by the Labour party. That cancellation has been welcomed across the House, but especially by Members with more rural constituencies such as mine.
I must also congratulate my hon. Friend the Member for Leeds North West (Greg Mulholland) on his tireless and passionate campaigning on beer duty. I know that he has some wonderful pubs and a very good beer shop in his constituency, I know how many excellent breweries we have up and down the country, and I know that our scrapping of the beer duty escalator will be a real boon both for the pub trade and for the brewing industry.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
The Chief Secretary has mentioned the beer tax, but does he have anything to say to the Scotch whisky industry, which is suffering as a consequence of the Budget?
Danny Alexander
I say, as I said directly to the Scotch whisky industry, that this Government are giving considerable support to it as it seeks to broaden its reach into export markets across the world. The work of UKTI, in particular, is of great assistance to that industry.
We are building a stronger economy and a fairer society, and we are also helping people who want to get on in life. If you want to get on in life, last week’s was a Budget that will support you. It was a Budget that will give thousands of people the opportunity to step on to the housing ladder or step up the housing ladder. Our £5.4 billion housing package will boost home ownership and kick-start the building of new homes. The intention of the help to buy scheme is to provide help to people who want to get their first home or move home but cannot afford the deposit that today’s mortgages now require. This is a complex policy area, and we are working with the industry to find a practical and sensible way of taking the scheme forward without blunting its radicalism or its reach. I am sure we will achieve that.
Danny Alexander
I am going to press on, as there is no time left.
There are many other ways the Government are helping people to get on in life. Our tax-free child care measures, for example, will ensure that from autumn 2015 vouchers supporting 20% of child care costs will be available to families when both parents or a single parent is working, neither parent is earning more than £150,000 a year and the parents are not already receiving a more generous level of support through the tax credit system.
The Government are helping people to get on in life and plan for their financial futures. Thanks to the excellent work of my the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), we have already brought in auto-enrolment, which will help bring 9 million people into a workplace pension scheme, and we are also radically simplifying the state pension system and bringing that simplification forward through the single tier.
Of course, there is a lot of work to do in the longer term to strengthen our economy, but we must start by cleaning up the mess made by the Labour party. We believe that we are putting the right measures in place to bring the deficit down and to speed up growth. The Budget is another step towards building a stronger economy and a fairer society to help those people who want to get on, and I commend it to the House.
Question put.