House of Commons
Prayers
This information is provided by Parallel Parliament and does not comprise part of the offical record
Oral Answers to Questions
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Aldous (Waveney) (Con)
1. What steps he is taking to relieve congestion on roads.
The Secretary of State for Transport (Mr Patrick McLoughlin)
The Government are committed to reducing traffic congestion and investing in our road infrastructure. Spending on strategic roads over this and the next Parliament will be £24 billion. A £500 million programme of pinch point schemes specifically targeted at tackling congestion is being progressed on both the strategic and local road network and a further £800 million is being invested in 25 local authority major road schemes. I am sure my hon. Friend will also join me in welcoming the additional £200 million that my right hon. Friend the Chancellor announced in yesterday’s Budget for pothole repairs.
Peter Aldous
I am grateful to the Secretary of State for that answer. The Prime Minister visited Lowestoft in January and saw for himself the fantastic opportunities in the offshore energy sector. Unfortunately, they could be choked off by congestion such as that experienced in the past fortnight. The problem could be solved by a new crossing at Lake Lothing. Suffolk county council, with the help of the local enterprise partnership and Waveney district council, has commissioned a study to come up with the right solution. Will the Secretary of State visit Lowestoft to see the problem for himself?
Mr McLoughlin
It has been a considerable time since I last visited Lowestoft, but following my hon. Friend’s invitation I shall certainly do so. Ministerial colleagues, including the Prime Minister, have visited. My hon. Friend’s points are well made, and they have been made to me by other colleagues.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Congestion would be much improved if the potholes in the roads were removed. Although I welcome the money that was made available yesterday, how will it be distributed? How much of it is coming to Scotland?
Mr McLoughlin
Scotland will get its share according to the Barnett formula as part of the announcement made by the Chancellor yesterday. It will be up to the Scottish Government to decide how they share the money between the authorities in Scotland.
Mr Simon Burns (Chelmsford) (Con)
Does my right hon. Friend accept that the A12 through Essex and into Suffolk and Norfolk is a main road to the ports at Felixstowe and elsewhere? Given that a significant proportion of it from the M25 to Chelmsford is already three-lane, would it not be sensible to relieve congestion into the East Anglian hinterland by turning it into a motorway?
Mr McLoughlin
My right hon. Friend makes an interesting suggestion. No doubt he will pursue that argument with me and the authorities on a number of occasions to come.
Mr Jim Cunningham (Coventry South) (Lab)
What is the Secretary of State doing about the congestion at Tollbar End, which is affecting businesses, particularly those in the export market, and people getting to work? I contacted his Department last week but I still have not had an answer.
Mr McLoughlin
I am very sorry that the hon. Gentleman has not had an answer. I could compare the time delays in reply to correspondence under this and the previous Government, but instead I will try to get the hon. Gentleman an answer as quickly as possible. We are investing significant amounts in road infrastructure, more than that invested by the previous Government. That shows this Government’s overall commitment to infrastructure investment in the United Kingdom.
Stephen Lloyd (Eastbourne) (LD)
One of the worst sections of road for congestion is the A27 from Eastbourne to Lewes. It has been appalling for many decades and I know that it is being considered by the Department for Transport. Does the Secretary of State agree that the best way to solve the congestion would be a new dualled trunk road?
Mr McLoughlin
I know that the hon. Gentleman has met the Minister responsible for roads, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), to make that point, which has been made to me, too, by other people in Eastbourne. However, there is some controversy, not least because the hon. Member for Lewes (Norman Baker) has a different view on the matter.
Richard Burden (Birmingham, Northfield) (Lab)
Traffic jams cost UK motorists 30 hours each last year and were often made worse by a £10 billion backlog in the road repair programme. As local road maintenance was cut by nearly a sixth between 2010 and 2013, is the Secretary of State surprised that the Chancellor’s announcement yesterday of a pothole challenge competition hardly has many motorists shouting “bingo” today?
Mr McLoughlin
I am sorry that the hon. Gentleman makes such a point, because I do not know whether he can get the shadow Chancellor to commit to investments such as those we are putting into this country’s road infrastructure. As I understand it, he is not allowed to make any commitments whatsoever. I am very glad not only that the Chancellor yesterday announced an extra £200 million to invest in our roads but that later today I will announce the allocation of the £140 million that I announced a few weeks ago to all local authorities. I hope that they will use the £140 million along with the £200 million announced yesterday to make significant improvements to our roads.
Ian Swales (Redcar) (LD)
2. What assessment he has made of the adequacy of public transport links to Durham Tees Valley airport.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
My assessment is that public transport links to Durham Tees Valley airport are very poor. However, we stated in the aviation policy framework that we will work with airports, transport operators, local authorities and local enterprise partnerships to improve surface access to the UK’s airports.
Ian Swales
In the year to last March, the station at Durham Tees Valley airport had eight passengers—not per hour or per day, but in the whole year. Only one service a week stops there, cynically avoiding the costs of a real closure. This is a symbol of the long-term neglect of the area and its airport. Will the Minister require the airport operators to link their passenger terminal to proper public transport services, timed to serve their flights?
Mr Goodwill
I know that this is what is known as a parliamentary service, which does save the cost of closure, but given that the passenger numbers were 900,000 in 2006 and 161,092 in 2013, action on more than just public transport links will be required to ensure the airport’s future.
Andy McDonald (Middlesbrough) (Lab)
The Minister will know that the Tees Valley metro was seen as a key component in establishing better links to the airport. That concept appears to have slipped somewhat. Will he meet me to discuss the viability of the Tees Valley metro so that we can pursue our economic ambitions right across the Tees valley?
Mr Goodwill
I will be more than happy to do so, and ensure that Teesside has the same good transport links from which many other parts of the country benefit.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
3. When he next plans to meet representatives of the Passenger Transport Executive Group.
The Secretary of State for Transport (Mr Patrick McLoughlin)
There are no arrangements in place at present. However, while it has been some time since my last meeting with the group, I have met representatives individually in the intervening period. I would therefore welcome the opportunity to meet PTEG or indeed with representatives of any of the local government organisations from Newcastle.
Mr Brown
There is quite a lot to discuss—for example, quality contracts—but of immediate concern is the impact of the new combined authorities on the existing joint boards. Can the Secretary of State say anything today that would reassure the employees of the existing joint boards, who are uncertain about their future?
Mr McLoughlin
The proposals for the combined authorities would see the passenger transport executives continuing to provide an executive function on transport issues across the board. The exception to that is west Yorkshire, where the local authorities have decided to dissolve their PTEs in addition to the integrated transport authority. The powers and duties of the PTE will be transferred to the new combined authority. I am more than happy to meet the right hon. Gentleman to discuss his worries.
Charlie Elphicke (Dover) (Con)
The next time my right hon. Friend meets PTEG, will he invite representations on the progress of the Dover Priory railway station project, which is being held up by Her Majesty’s Revenue and Customs?
Mr McLoughlin
If my hon. Friend had not asked that question, I do not think that I would have done, but as he has, I will certainly look into it and write to him.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
When the Secretary of State next meets representatives from PTEG, they will no doubt tell him that bus fares are rising year on year and that routes are being cut. Should not operators such as Stagecoach, which make a huge profit off the back of the taxpayer subsidy, start behaving more responsibly, rather than threatening legal action at the prospect of a quality contract in Tyne and Wear?
Mr McLoughlin
We want to see good co-operation between the passenger transport executives, the combined local authorities and the bus operators that provide the services in their area. They need to work together to give the best services to local people. Bus services are incredibly important to people and are vital in enabling them to go about their daily business and to get to work and to their leisure activities.
Dr Julian Huppert (Cambridge) (LD)
4. What progress he has made on implementing recommendations of the “Get Britain Cycling” report of the all-party parliamentary cycling group. [R]
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
My hon. Friend chaired the all-party parliamentary cycling group yesterday when I outlined the Government’s commitment to cycling. With regards to the all-party group’s recommendations, the Government provided an update to Parliament last month.
Dr Huppert
I thank the Minister for coming to speak to us yesterday. We made a number of recommendations, which were endorsed by this House when we debated the subject. Two of those would have a cross-departmental action plan and sustained funding at £10 per head. We have had some pots of money, but not at that level. Will he update us on those two issues?
Mr Goodwill
The first point that needs to be made is that, compared with the previous Government, we have doubled spending on cycling. Indeed, the eight cycling ambition cities have benefited from that funding, and Cambridge is one of them.
John Cryer (Leyton and Wanstead) (Lab)
If we are to get more people cycling, the physical fear—real or imagined—must be removed, particularly on busy roads such as those near my constituency where a number of people have died. How can the Government address that and take away the physical fear of cycling on busy roads?
Mr Goodwill
The Highways Agency is spending £40 million on cycling improvement schemes. I think that some of the media coverage, particularly in London last year, gives the impression that cycling is more dangerous than it actually is. It is safer now than it ever has been.
Guy Opperman (Hexham) (Con)
Local communities in Northumberland are keen to access the future cycling fund. Will the Minister meet me and representatives from Northumberland to discuss how the local enterprise partnership and individual communities can access future funds, and when that will happen?
Mr Goodwill
We are certainly always keen to meet local authorities and local enterprise partnerships to look at imaginative ways of encouraging more cycling. Indeed, we will publish our cycling delivery plan later this year.
Stuart Andrew (Pudsey) (Con)
5. What assessment he has made of Network Rail’s planned control period 5 investment programme.
The Secretary of State for Transport (Mr Patrick McLoughlin)
Network Rail is about to embark on CP5, which runs from 2014 to 2019, during which it will spend £38.5 billion on the railways—a significant increase on the £32 billion spent in the previous five-year period.
Stuart Andrew
May I begin by thanking my right hon. Friend for ruling out the introduction of car parking charges at stations in west Yorkshire and by congratulating him on the significant amount of electrification that is taking place on our railways, compared with the pitiful amount under the previous Government? Does he agree that if he wanted it to be really impressive, to put the icing on the cake, electrifying the Caldervale line through New Pudsey would make it even better?
Mr McLoughlin
I am very glad that car parking charges have been ruled out, despite some people’s claims that they would be introduced. It was partly my hon. Friend’s vigorous campaign that led to that decision. He is absolutely right about the huge amount of electrification taking place on our railways—over 800 miles, compared with the 9 miles electrified during Labour’s 13 years in government.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The planned investment is very welcome, but what will the Secretary of State do to ensure that the correct rolling stock is available when electrification is completed so that we do not have a repeat of the current fiasco with TransPennine Express?
Mr McLoughlin
I think that it is absolutely right that we get rolling stock. I am sure that the hon. Lady, and indeed the whole House, will join me in welcoming the announcement made by Hitachi overnight that it will base its world headquarters for rail development in this country. That is incredibly good news and I am sure it will be welcomed by all. The point she makes about rolling stock overall is important. It shows the kind of development that is needed in railway rolling stock orders.
Andrew Percy (Brigg and Goole) (Con)
My right hon. Friend will be aware of the campaign in the Humber to bring electrification through to Hull. Does he have an update on that important project for our area?
Mr McLoughlin
I have met hon. Friends and other hon. Members from the Hull area to discuss the representations they have made. I am very pleased to be able to announce today that I can make available the £2.5 million to take this project up to GRIP 3—governance for railway investment projects. That notification will be going to Network Rail and I will write to colleagues today to tell them that I am making the money available.
Margaret Beckett (Derby South) (Lab)
Although we all welcome investment in Network Rail, does the Secretary of State think that it is acceptable that the procurement programme for traffic management is going forward before a full and independent review can establish whether £1 billion of savings is possible?
Mr McLoughlin
The right hon. Lady has written to me on this matter, and I have not only corresponded with the company concerned and other interested Members, including my hon. Friend the Member for Mid Derbyshire (Pauline Latham), but visited the company. Anna Walker, who chairs the Office of Rail Regulation, has written me a letter showing how it will investigate the points that have been made by DeltaRail.
Derek Twigg (Halton) (Lab)
What proportion of the money that the Government are spending and plan to spend on the railways is being spent on schemes that were initiated or started under the previous Labour Government?
Mr McLoughlin
The schemes that have been put forward in CP5 have been approved by this Government.
Mary Creagh (Wakefield) (Lab)
We welcome electrification of the railways, but not if there are no trains to run on the tracks. One of the achievements of this control period will be the electrification of the Liverpool to Manchester line, which should mean better services, but the Department’s incompetence on franchising has put that progress at risk, as some TransPennine Express trains will transfer to Chiltern Railways next year. What is the Secretary of State going to do about it?
Mr McLoughlin
I realise that the hon. Lady has to try to find some things to attack and criticise us on, but I would have thought she welcomed a very significant increase in the investment into the railways. There were 9 miles of electrification during the 13 years of the previous Government; there will be 880 miles of electrification under this Government. Of course it is absolutely right to get the rolling stock right. Part of the problem with rolling stock has been the dismal performance of the previous Government in ordering it.
Mary Creagh
If it was so dismal, I do not understand why Hitachi has moved here because of the intercity express programme, but we will move on from that, because it was a Labour decision that caused that announcement today. [Interruption.] It was an order made under a Labour Government, not a Conservative Government.
The point of railway investment is to make life better for passengers, not worse. The Secretary of State talks about the electrification of the midland main line in control period 5, but again there are no answers on which trains will run on those tracks. Handing down older trains from the east coast line will lead to slower journeys on midland line trains than with the current diesel trains. What reassurance can he give the House that his botching of the TransPennine Express and Northern Rail franchises will not happen again in his own backyard?
Mr McLoughlin
The simple fact is that rail usage in this country has been a tremendous success that should be celebrated across the House. There were 750 million passenger journeys when the railways were privatised; there are 1.5 billion rail journeys now. I am very pleased about that. We are investing huge amounts in the railways. Of course there will be some problems with rolling stock, but it is this Government who have confirmed the intercity express programme orders for the east coast line and the great western line, and this Government who are signing off the contracts.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
6. What estimate his Department has made of the number of people who will be killed or injured in road traffic collisions in the UK between 2014 and 2030; and if he will estimate the economic value of preventing such casualties.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
Road casualties have followed a declining trend over recent decades. With unprecedented investment in roads and continued improvements in vehicle technology, there are signs that this trend will continue. The economic cost of each casualty has been calculated at £1.7 million.
Mr Sheerman
The Minister knows of my long-term interest in road safety as chairman of the parliamentary advisory council for transport safety. Are we not in danger of becoming complacent? From now until 2030, it is likely that a third of a million people will be killed and seriously injured on Britain’s roads. The cost to families, to communities and to the national health service is going to be dreadful. Should we not act now to improve our performance?
Mr Goodwill
The UK leads Europe in road safety. Only Malta has a better record, and our record is twice as good as that of France. However, that is no reason for complacency or for letting up in the measures that we can take further to improve road safety.
Miss Anne McIntosh (Thirsk and Malton) (Con)
My hon. Friend’s constituency and mine are served by the A64, and there will inevitably be casualties and fatalities on that road. Will he take this as a representation on improving it to reduce the likelihood of any such future casualties or fatalities?
Mr Goodwill
There are a number of single-carriageway trunk roads where we have particular concerns about the fatality and casualty levels. The Department collates data and produces a list of the worst blackspots which we can then identify for future investment.
David Rutley (Macclesfield) (Con)
7. What plans he has to review funding for mountain rescue teams.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I am pleased to inform my hon. Friend and my hon. Friends the Members for Skipton and Ripon (Julian Smith) and for Penrith and The Border (Rory Stewart)—and the whole House—that we have listened carefully to the concerns they have raised and will therefore provide in 2015-16 grants totalling £250,000 to mountain rescue organisations in England and Wales, Scotland and Northern Ireland for use towards the cost of their equipment and training. That is in addition to the grants totalling £600,000 that we have made available over the past three years and the £200,000 to be payable this year for 2014-15.
David Rutley
I welcome the Minister’s announcement today and the support that he is showing mountain rescue teams across the country. In Macclesfield and other constituencies where outdoor activities in the hills play an important part in the lives of residents and visitors, mountain rescue teams may be seen by many as a fourth emergency service. Will the Minister join me in thanking them for their important work and recognising what the all-party mountain rescue group also does in supporting them?
Stephen Hammond
My hon. Friend is right. I am happy to commend his and all local mountain rescue teams throughout the country. I recognise and commend the work of the all-party group.
Rory Stewart (Penrith and The Border) (Con)
I add my voice in thanks to the Minister for this wonderful announcement. May I please remind him of two things: first, the important work also done by cave rescue, in addition to mountain rescue; and secondly, that all the work of the mountain and cave rescue teams is entirely voluntary, notwithstanding the compensation for VAT on their equipment?
Stephen Hammond
I am duly reminded. Undoubtedly, it was my hon. Friend’s campaign and those of my hon. Friends the Members for Skipton and Ripon (Julian Smith) and for Macclesfield (David Rutley) that made us consider the grants that I announced today.
Julian Smith (Skipton and Ripon) (Con)
It will be not just mountain rescue but cave rescue organisations in Grassington and Clapham in my constituency that benefit. The Transport Secretary has been on his bike in Skipton and Ripon. Will he now commit to coming down a cave with me in the near future?
Mr Speaker
The hon. Gentleman poses a very serious challenge to even the most vivid imagination in the House.
Stephen Hammond
I really wonder whether I can answer the question better than Mr Speaker. I am loth to commit my right hon. Friend the Secretary of State, but between us I am sure we will find someone who can join my hon. Friend the Member for Skipton and Ripon.
Steve Rotheram (Liverpool, Walton) (Lab)
8. What plans he has to review MOT tyre requirements for buses and coaches.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
Buses and coaches are inspected annually from the anniversary of their date of registration. Tyre condition, wear and their suitability for the vehicle are all checked at that time. Tyres are also checked routinely as part of the safety inspections undertaken by traffic commissioners who manage the licensing of such vehicles.
Steve Rotheram
The Minister may be aware of the tragic death of three people in a car crash on the A3 in September 2010, when a 19-year-old tyre burst on the front axle of their coach. Early-day motion 1166 calls on the Government to commission urgent research into whether legislation can be enacted to limit the age of a tyre on a bus or coach. Will he confirm that the Government are taking this issue seriously? When will they commission such a study?
Stephen Hammond
The hon. Gentleman will know that my right hon. Friend the Secretary of State met the previous shadow Secretary of State, along with one of the mothers of the people who were tragically killed in that coach crash. As an interim measure, the Department has already published guidelines to the bus and coach industry recommending that tyres of more than 10 years old are not fitted to the front axles of such vehicles. That was in December 2013, and I can confirm that we are in discussion with the tyre organisations about the product and about whether age and maintenance are the key factors and how they should be addressed.
Kevin Brennan (Cardiff West) (Lab)
9. What his plans are for the Severn bridge tolls when the current operator’s licence ends.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
The UK Government are committed to the continued successful operation of these vital crossings. No decisions have been taken on future management or tolling arrangements on the crossings after the end of the current concession. However, any future regime would need to recover the costs it has incurred relating to the crossings, make provision for maintenance of the crossings and reflect the interests of roads users in England and Wales.
Kevin Brennan
If the toll since the first bridge was built in 1966 had increased simply in line with inflation, it would be just over £2 today, yet it is now £6.40 for a car. That is a tax on the south Wales economy, as the tolls operate only in one direction. Should the Government not give careful consideration to reducing the tolls when the opportunity arises or getting rid of them altogether?
Mr Goodwill
At the end of the concession period VAT will no longer be payable, so the Government of the day could take a decision based on that. Tolls for heavy goods vehicles are comparable with those at other crossings. For example, after taking account of the fact that crossing is free in one direction, the toll at the Humber crossing is £12 to save 45 miles, and the toll at the Severn is £9.60 to save 52 miles.
Mr Mark Harper (Forest of Dean) (Con)
The Minister will know from the recent debate in Westminster Hall that the old Severn bridge is entirely in England and half of it is in my constituency. When he is considering the future use of toll revenue, will he bear in mind my request for consideration of a third Severn crossing to relieve traffic congestion in my constituency, and whether toll revenue may be used to part-fund that if that is entirely necessary?
Mr Goodwill
The Government should certainly consider that. Indeed, the announcement in yesterday’s Budget on the Merseylink crossing indicates that there can be some cross-subsidisation of crossings to fund new provision.
Mel Stride (Central Devon) (Con)
10. What steps he plans to take to improve road and rail infrastructure into Devon and Cornwall.
The Secretary of State for Transport (Mr Patrick McLoughlin)
My Department is reviewing the resilience of the transport network to extreme weather events. This will include the south-west. The current priority is restoring rail services through Dawlish. We have announced £31 million for 10 resilience projects and commissioned Network Rail to identify a resilient rail route west of Exeter. There is £183.5 million available nationally to help repair local roads and we are undertaking a feasibility study to improve options for the A303.
Mel Stride
My right hon. Friend will be aware of the proposal for a new railway line from Exeter to Plymouth via Okehampton and Tavistock. May I urge him to take it very seriously and perhaps to visit Okehampton with me to meet local business people and others in order to have the case for the economic advantages of that route presented to him?
Mr McLoughlin
I have asked Network Rail to do a substantive piece of work, which I expect to get this July and which will address some of the options. I very much hope to visit Dawlish shortly and if a visit to my hon. Friend’s constituency can be arranged at the same time, I will try to do so.
Alison Seabeck (Plymouth, Moor View) (Lab)
I will not go down the route of disagreeing with the hon. Member for Central Devon (Mel Stride) about the Okehampton option. The Secretary of State knows of my support and admiration for those involved in keeping the south-west open for business. There are, however, some issues: there was nothing in the Budget for road or rail transport in the south-west and, to be frank, we have a franchising dog’s breakfast which has cost the taxpayer £55 million. People and businesses in the south-west deserve better. Will the Secretary of State press his colleague the Chancellor to ensure that commitments for finance for investment will be made either before or during the next autumn statement?
Mr McLoughlin
I hear what the hon. Lady says. I was able to announce some improvements that were welcomed with regard to an early service from Plymouth to London. I hope that goes some way to answering the question. I appreciate the points made by the hon. Lady and the way in which this particular incident had a dramatic effect on the south-west. We need to look at resilience down there. We also need to look at what we can do with regard to both rail and road, and we have already committed ourselves to an intensive investigation of the A303.
Andrew George (St Ives) (LD)
Further to that, it is important that we get a resolution on the temporary franchise as quickly as possible. In congratulating my right hon. Friend on getting a solution in Dawlish, may I ask which Government Departments contributed the finance to ensure that that very expensive project was brought to a conclusion?
Mr McLoughlin
May I use this opportunity to place on record my thanks to Network Rail—I am sure that I speak on behalf of colleagues in the south-west as well—for responding magnificently to the problems that were faced in Dawlish? Anybody who has read about the continuing work to restore that link will be only impressed with the work that has been put in by Network Rail, which is often criticised for actions on the railways. I hear what the hon. Gentleman says about finding the funds. The Government will find them and I am not too worried about which Departments they will come from.
Mike Thornton (Eastleigh) (LD)
11. What steps his Department is taking to support the take-up of low- emission vehicles.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
The Government have committed up to £900 million to promote the uptake of ultra-low emission vehicles. Measures include a £5,000 buyer incentive and funding for charge points, including at people’s homes and locations such as train station car parks and the public sector estate.
Mike Thornton
I welcome the pioneering initiative the Government have put in place and the efforts to ensure that this country becomes a global leader in the field. However, I recently met representatives from the Guide Dogs for the Blind Association, who brought to my attention the danger that these very quiet vehicles can hold to those whose sight is impaired and to older people and children. These people rely on vehicle noise to help them judge whether it is safe to cross the road. Is the Minister aware of the research that shows that such quiet vehicles are involved in 25% more pedestrian collisions than conventional vehicles?
Mr Goodwill
The latest advice I have is that there is not a higher level of accidents involving these types of vehicles. We have an awful lot of vehicles that make no noise on our roads—they are called bicycles and people have to be aware of them as well.
Barry Gardiner (Brent North) (Lab)
The Minister initially said that the Government would spend £400 million supporting low-emission vehicles. Answers to parliamentary questions have shown that £170 million of that will not be spent by the end of this Government’s life. Last year, the Chancellor cut the first-year capital subsidy for low-emission vehicles, as a result of which no right-handed vehicles are being produced in the UK. What will he do to incentivise this industry, and to ensure that the emissions causing the deaths of 29,000 people each year are cut down?
Mr Goodwill
As more manufacturers produce these vehicles, they are becoming much more mainstream, and people are getting used to the issues about range anxiety. As a Yorkshireman, I was particularly pleased to hear that the new Volkswagen model is to be called the e-up!
Julie Hilling (Bolton West) (Lab)
12. What steps he is taking to ensure adequate supply and stability of rolling stock until 2018.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
The Government have embarked on a programme of rail capacity increase greater than anything seen since the Victorian age. More than 3,100 new carriages will be in service by the end of 2019. Through the franchising programme, we expect the market to deliver additional rolling stock solutions, building on the possibilities created by the rail investment strategy, electrification projects and capacity increases. I am confident that a solution will shortly be found to enable diesel trains to be released to address the capacity issues in Bolton.
Julie Hilling
My constituents are fed up with jam tomorrow and playing sardines today. With diesel trains in great demand but short supply for the next four or five years and with services for my constituents being some of the most overcrowded in the country, what is the Minister doing to prevent other companies from snatching more of our trains from Northern Rail and First TransPennine Express?
Stephen Hammond
I was pleased to meet the hon. Lady and other Members from Bolton recently. She knows that commercial leases are a matter for the operating companies, but also that, as I said a moment ago, I have worked with operating companies to reach a solution to ensure that there is extra capacity on the line in Bolton from Christmas onwards.
Mr William Bain (Glasgow North East) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Transport (Mr Patrick McLoughlin)
Following the wettest winter on record, I recently announced an extra £140 million for urgent repairs to local roads, bringing the total fund to more than £170 million. Today, I am announcing the individual allocations of that funding among local authorities. Some £47 million will be allocated to councils in the south-west that were particularly badly affected. I expect councils to spend the money wisely and quickly, and councils that do so will be particularly well placed to bid for additional funds for road repairs in the next financial year from the £200 million pot announced by my right hon. Friend the Chancellor in yesterday’s excellent Budget.
Mr Bain
Thirteen months ago, the Public Accounts Committee told the Secretary of State that serious fundamental errors in the franchising process for the west coast main line had led to more than £55 million of public money being flushed down the drain. What action has he taken to make sure that that Tory franchising fiasco never happens again?
Mr McLoughlin
I announced a number of follow-ups that I took as a result of that particular franchising problem—I was incredibly open with the House about it—through both the Laidlaw inquiry and the Brown inquiry. I do not recognise the £55 million figure that the hon. Gentleman talks about.
Mr Adrian Sanders (Torbay) (LD)
T3. Will the Minister commit to looking at the electrification of the Penzance to Paddington route, a scheme which, at a fraction of the cost of HS2, would benefit everyone in the south-west, unlike some of the other promoted schemes that would benefit only some people at the expense of others?
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
In 2012, the Department commissioned a study from Arup to look at electrification to the west of Newbury. We have already seen some of that study’s results, which indicate that there is a very good business case for going to Bedwyn, and further results from that study are being considered by the Department.
Lilian Greenwood (Nottingham South) (Lab)
First Great Western was originally due to pay more than £800 million in premium payments over the years 2013 to 2016, but the Government have now handed over the franchise for just £17 million a year. If there is now a further five-year extension on the line, with no competition, at the same time as Ministers are selling off the successful East Coast operator, will not taxpayers once again pay the price for this Government’s incompetence and ideology?
Mr McLoughlin
The hon. Lady should be careful about the points that she makes about that matter. She talks about First Great Western’s right to cancel the contract, but that right was given to it by the last Government when they negotiated the franchise. All it was doing was exercising an option that the last Government gave it. If she is saying that the last Government made a mistake in dealing with that matter, she might be right. I am determined to ensure that the people who are served by that franchise on that route get better services. That is why we will insist that first-class carriages are converted to standard class to provide more capacity on the line, and why we are improving the sleeper services down to Cornwall—something that has been welcomed widely.
Greg Mulholland (Leeds North West) (LD)
T5. I am a big supporter of high-speed rail, but it has to link to the north and then to Scotland to bring benefits. May I ask the Secretary of State to do what the previous Government failed to do, which is to look at the viable alternative to HS2, “High Speed UK”, which would cause less environmental damage, would be £14 billion cheaper and would connect more cities than just Birmingham and London?
Mr McLoughlin
What we have to do with high-speed rail is vastly to increase capacity, which HS2 does. That is vital. I think that HS2 is the right scheme to go ahead with. Of course it has to link in. In the excellent report that was published this week, David Higgins showed how we will do that and how we will get a train service that is adequate for this country not just for 10 or 20 years, but for the next 150 years.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T2. This morning, like many Members, I caught a London bus on my way to work. Quality contracts are one reason why London has bucked the national trend of rising fares and falling passenger numbers. Will the Secretary of State join me, Tyne and Wear public transport users group and his friend, the Mayor of London, in supporting quality contracts for quality bus services?
Stephen Hammond
There are many ways of developing quality bus services up and down the country. The Government are making a huge commitment through grants to bus operators and have reformed the bus service operators grant so that local authorities are now in charge of it. We believe that partnership is the best way forward and I am convinced that it still is.
Mr Simon Burns (Chelmsford) (Con)
Does my right hon. Friend the Secretary of State agree that it is somewhat surprising that more has not been said in this Question Time to congratulate Hitachi on its decision to bring its rail business headquarters to England? Does he agree that, ever since he gave it the contract for the intercity express programme rolling stock, it has gone from strength to strength? The irony is that, in some years’ time, we could be a net exporter of rolling stock, rather than having to import it.
Mr McLoughlin
I have mentioned that once or twice, and I am grateful to my right hon. Friend for mentioning it again. It is fantastic that Hitachi has announced that it will locate its headquarters in London and that it is building its manufacturing plant in Newton Aycliffe. That follows the contracts to build the new IEP trains that were awarded and signed by this Government.
Barbara Keeley (Worsley and Eccles South) (Lab)
T7. The Government say that there is no time in the next 14 months to bring forward a dedicated taxi Bill. Instead, they are pushing through proposals to lower standards and deregulate the taxi market outside London in the Deregulation Bill. Given that there is so little for Parliament to do most weeks, will Ministers explain their actions and say why they cannot take a taxi Bill through the House in the next 12 months?
Mr McLoughlin
I am not in a position to announce what will be in the future legislative programme for this House. It is no secret, given that it has been announced by my right hon. Friend the Leader of the House, that the state opening of Parliament will be in June. There is certainly no time left in this Session.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
The Institute of Directors surveyed more than 13,000 directors for its spring report to gain their views on HS2. More than half of them thought that it was poor value for money and more than 60% thought that the budget that is earmarked for the project would provide a better return if it was used to improve the existing road and rail networks. Why do the Government not listen to the wider business community, rather than to the lobbying of businesses with vested interests, such as the High Speed Rail Industry Leaders Group, most of whom turned out to be on the Government payroll?
Mr McLoughlin
I listen to the Institute of Directors, and I also listen to the CBI, which supports HS2, and to the British Chambers of Commerce, which has written to the Prime Minister about it. I also listen to the local authority leaders, who are united in their view that HS2 is the right thing to do to close the north-south divide in this country and provide the north with the type of rail services that it deserves. I would also point out that we have had significant investment in London transport, and it is about time that the rest of the country got some of the investment as well.
Phil Wilson (Sedgefield) (Lab)
May I join the Secretary of State in welcoming Hitachi’s announcement that it is moving its global rail operation to the UK? That will create a lot of jobs in my constituency. Will he acknowledge two things, however? The first is that Hitachi had identified Newton Aycliffe as its manufacturing base before the last election because of Labour’s intercity express programme, and the second is that it has moved here also because we are in Europe, and it would be a disaster to leave the European Union.
Mr McLoughlin
One reason why this country has been so successful in getting inward investment is the long-term market changes that we have made in the United Kingdom, which were started by Baroness Thatcher. I well remember when Toyota came to this country, which was the largest single investment ever made here at more than £800 million. I also remember when Nissan came here. I very much welcome Hitachi, but it follows a number of other Japanese companies in coming to this country, investing in it, providing good, long-term employment and doing very well for the United Kingdom.
Sir Roger Gale (North Thanet) (Con)
Yesterday, the owner of Manston airport in Kent announced the proposed closure of that important airfield. Given that Manston has the fourth longest runway in the country and is a major diversion field and a search and rescue base, will the Secretary of State review the matter in the national interest to see how Manston may be kept open?
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
It certainly is disturbing news, given the importance that we place on regional airports. It is disappointing that Manston has not been able to attract some of the low-cost carriers that it hoped to, but I am certainly happy to meet my hon. Friend to see whether there is a way forward.
Jim Shannon (Strangford) (DUP)
Will the Secretary of State make bus driver disability awareness training compulsory in his Department’s review of the EU bus and coach regulation this month?
Mr McLoughlin
That has been mentioned to me, and I will certainly want to look into it. I will write to the hon. Gentleman in more detail.
Mr Tobias Ellwood (Bournemouth East) (Con)
Pokesdown railway station, in my constituency, is in dire need of upgrade. The lifts have not worked for a number of decades. In response to a parliamentary question, the Minister said that we should blame South West Trains. I wrote to South West Trains, and it said that we should blame the Government, because that is not part of the franchise agreement. All that the people of Bournemouth want is for the lifts to be working. May I invite the Minister to come to Bournemouth to take a look at the situation?
Stephen Hammond
My hon. Friend will know that the Government support local decisions by local communities on improving local connectivity, but I am happy to accept his kind invitation.
Mr Speaker
Order. I am sorry to disappoint colleagues. I recognise the level of demand, but we must move on.
Natascha Engel (North East Derbyshire) (Lab)
1. What assessment the Commission has made of the potential implications for the House Service of the establishment of further parliamentary commissions.
John Thurso (Caithness, Sutherland and Easter Ross)
The establishment of a parliamentary commission would be a matter for the two Houses. Should a motion to establish a commission be tabled in this House, the accounting officer is required under Standing Order No. 22C to provide an assessment of the financial implications. If a parliamentary commission were established, the funding and practical arrangements would then fall within the remit of the House of Commons Commission, advised by the Finance and Services Committee and others. Parliamentary commissions are relatively rare, and the implications will depend on the details of any specific proposal.
Natascha Engel
I thank the hon. Gentleman for his answer. Does he agree that it should be down to the House to decide what the remit and resources of any parliamentary commission or Joint Committee should be, to ensure that it does not cut across the work of departmental Select Committees but instead complements it?
John Thurso
The hon. Lady puts her finger on an extremely important point, which is that the merits or otherwise of commissions and Committees are a matter for the House, or for the two Houses in the case of a parliamentary commission. Should a commission or Committee be appointed, it would be for the House authorities, including the House of Commons Commission, to make the arrangements for it to be properly resourced.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Would it not be sensible if the House of Commons Commission were involved in the preparation of the note to be prepared by the Clerk of the House about the costs of such a parliamentary commission, so that it could give its view on the matter? Is it not the case that the additional net cost to the House of Commons of about £175,000 is pretty much de minimis in our budget of £215 million? After all, spending money on scrutinising the Executive is what the House of Commons is for, and cost would be a poor excuse from the Government not to have a parliamentary commission.
John Thurso
I do not quite share the hon. Gentleman’s definition of de minimis. Standing Order No. 22C would take de minimis as below £50,000, and I think that saving, or spending, £175,000 would be above de minimis. However, his point that the resource required would be well within the scope of the resources provided is a good one. As I say, it would be for the House and its relevant Committees to make the necessary decisions, following which the House of Commons Commission would undertake the necessary work on resources.
Nic Dakin (Scunthorpe) (Lab)
2. What recent assessment he has made of Government Departments’ performance in answering written parliamentary questions on time.
The Deputy Leader of the House of Commons (Tom Brake)
My office collates departmental performance information for ordinary and named day parliamentary questions for each Session, which are submitted to the Procedure Committee. My right hon. Friend the Leader of the House provided data relating to the last Session to that Committee in July 2013, and those data are available on the parliamentary website.
Tom Brake
I thank the hon. Gentleman for that question. Clearly, the Government want to ensure that best practice is spread to ensure that all Departments are performing at a very high level. If five Departments are deteriorating, a greater number are improving, and we know that even big Departments such as the Department of Health are able to achieve a fantastic score of responding to 99% of ordinary questions within an appropriate time.
Mr Philip Hollobone (Kettering) (Con)
Which is the best performing Department, which is the worst performing, and would the Deputy Leader of the House consider drawing the attention of the Prime Minister to the worst performing Department on a quarterly basis?
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
3. What steps he is taking to encourage his ministerial colleagues to make Government amendments to legislation in the House rather than in the House of Lords.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
7. What steps he is taking to encourage his ministerial colleagues to make Government amendments to legislation in the House of Commons rather than in the House of Lords.
The Deputy Leader of the House of Commons (Tom Brake)
All will be well—[Interruption.] There are so many questions. [Interruption.] Inspiration is to hand; I thank the Leader of the House. It illustrates just how well we work together.
It is usual practice for the Government to make amendments, where possible, in the House of introduction. However, the Government are rightly expected to listen and respond to debates on Bills in both Houses of Parliament, and it is, of course, the core strength of our Parliament that any amendments made to Bills in the House of Lords must also be agreed by this House.
Mr Speaker
I call Nic Dakin—sorry, I mean Debbie Abrahams. We remember his pearls of wisdom.
Debbie Abrahams
That is a disappointing response from the Minister. The Government are increasingly bypassing this Chamber by introducing Bills in skeleton form and then pushing them through the House of Lords. The Financial Services (Banking Reform) Bill left this Chamber 29 pages long, and ended up with more than 200 pages in the Lords. Other examples include the Enterprise and Regulatory Reform Act 2013, and so on. Will the Leader of the House commit to ensuring that that does not happen to future legislation?
Tom Brake
I am disappointed with what the hon. Lady has to say. Clearly it is appropriate to ensure that Bills that start in the House of Commons are appropriately considered, and that those which start in the House of Lords are appropriately considered. It may be of interest to the hon. Lady to know that the number of amendments passed in each House is roughly of the same order.
Tom Blenkinsop
The Agricultural Wages Board was abolished last year by an amendment added to the Enterprise and Regulatory Reform Bill at the last minute in the House of Lords. The Bill was then scheduled so that there was no time to debate the move in the Commons. Does the Leader of the House agree that the Government are deliberately weakening the ability of the House of Commons to scrutinise the Executive, especially on an issue such as this, which undermines workers’ terms and conditions at one fell swoop?
Tom Brake
I do not agree. One of the biggest changes the Government have made is to provide much more time, for instance on Report, to ensure that Bills are appropriately considered. If the hon. Gentleman goes through the history books, he will find that he has to go back a very long time under the previous Government to identify when this level of scrutiny was given on Report.
Mr Mark Harper (Forest of Dean) (Con)
I commend the Government on that and draw attention to the increasing use of draft legislation, on which this Government have done so much better than the last one. Opposition Members should remember the 2005 to 2010 Parliament; by comparison, this Government have been a paragon of virtue.
Charlie Elphicke (Dover) (Con)
Does the Deputy Leader of the House recall, as I do, the Opposition’s many attempts in the House of Lords to muzzle time and again our tradition of a free press, for example in the Crime and Courts Bill? Does he agree that people who sit in glass houses should not necessarily throw stones?
Tom Brake
I am very happy to support what the hon. Gentleman says. I am very proud of our record of ensuring that the right level of scrutiny is available for Bills and ensuring that the right number of Bills are going through the House. The Opposition often criticise the Government for what they allege is a light programme. We have a programme that is delivering the goods.
Angela Smith (Penistone and Stocksbridge) (Lab)
This morning’s written ministerial statement on drafting guidance for Government Bills represents a missed opportunity to address the Government’s dismal record on drafting legislation. Will the Deputy Leader of the House tell us how he and the Leader of the House plan to ensure that their Government’s Bills are more thoroughly drafted and scrutinised, especially by this House?
Tom Brake
I do not know, frankly, what the hon. Lady is referring to. This Government have put great emphasis on ensuring that Bills are effectively drafted. For example, we support the good law initiative, which ensures that Bills are clearer. We have done a considerable amount on explanatory notes to ensure that Members have a better understanding of Government amendments. I would appreciate it if the Opposition joined in that process, for example on the Deregulation Bill, to ensure that there is clarity on what their amendments are suggesting.
Mr Speaker
The exchanges are very protracted at the moment. I want to get through some more.
Pat Glass (North West Durham) (Lab)
4. What steps he is taking to encourage Ministers to make announcements to the House before their release to the media.
The Leader of the House of Commons (Mr Andrew Lansley)
The ministerial code is clear: when Parliament is in session the most important announcements of Government policy should be made in the first instance to Parliament. I regularly remind my colleagues of this.
Pat Glass
The Chancellor came to the House this week and announced a Budget that had been largely pre-announced through a series of press releases. I hear this complaint all the time in the House and the usual playground response is, “Well, the Labour Government did it.” May I remind the Minister that, whatever happened in the past, this practice is wrong? What is he going to do about it?
Mr Lansley
I think the hon. Lady may have prepared her supplementary question before the Budget took place. The Chancellor stood at the Dispatch Box yesterday and announced some of the most important reforms to pensions in nearly 100 years, and benefits for savers. As far as I am aware, there was not even speculation on what he was going to do before he announced those measures. She should know that under the terms of the Macpherson report, which the Treasury adhere to, we are clear on not providing advance information on tax and fiscal measures. That was adhered to in the Budget.
David Rutley (Macclesfield) (Con)
5. What steps the Government have taken to improve opportunities for scrutiny of legislative proposals.
The Deputy Leader of the House of Commons (Tom Brake)
The Government have improved opportunities for scrutiny by publishing more draft legislative proposals in each Session than the last Administration did. We have also piloted public readings in respect of two Bills, and have frequently allocated more than one day for remaining stages: that includes seven Bills in the current Session alone.
David Rutley
What steps are the Government taking to make legislation clearer, more straightforward and easier for the public as well as parliamentarians to understand, in order to facilitate better scrutiny?
Tom Brake
As part of the good law initiative, the Government are taking a number of steps to promote law that is clear, necessary, coherent, effective and accessible. For instance, we are considering how we can improve the drafting and presentation of Bills and supporting documents such as explanatory notes, as well as access to and navigation of existing legislation online.
Kerry McCarthy (Bristol East) (Lab)
6. What steps he is taking to improve opportunities for the scrutiny of draft statutory instruments.
The Leader of the House of Commons (Mr Andrew Lansley)
The Procedure Committee heard evidence on delegated legislation from the Hansard Society on 29 January this year. I am sure that the Committee would welcome the views of the hon. Lady and others when considering whether to undertake a fuller inquiry.
Kerry McCarthy
One of the problems of discussing statutory instruments is that we are often given very little notice of them. We have heard that a statutory instrument on fox hunting may well come before the House. Will the Leader of the House tell us how much notice we will be given, how much time will be allowed for a full debate, and whether the statutory instrument will be debated in the Chamber?
Mr Lansley
There are requirements relating to notice in Standing Orders, and I try to give the House notice of business on a provisional basis if it is to be dealt with on the Floor of the House. I looked at statutory instruments from the Department for Environment, Food and Rural Affairs this morning, and, as far as I am aware, no statutory instrument of the kind described by the hon. Lady is before the House.
Mr Christopher Chope (Christchurch) (Con)
8. What is the latest estimated cost of the proposed education centre in Victoria Tower gardens.
John Thurso (Caithness, Sutherland and Easter Ross)
The latest estimate of the cost of constructing and equipping the education centre is £6.93 million, excluding value added tax but including the usual provision for contingencies.
Mr Chope
Will the hon. Gentleman tell me how expenditure of some £7 million on what will be a temporary building can possibly be justified? Would it not be much better to put the education centre into the space that is currently occupied by the loss-making day nursery overlooking Parliament square?
John Thurso
The hon. Gentleman and I served together on the Administration Committee during the last Parliament, and I know of his enthusiasm for the education centre. We considered a wide range of options, all of which we have considered again during the current Parliament, and this option provides by far the best value. It allows us to increase the number of children who go through the education centre from 45,000 to 100,000, which is a significant advance.
A teacher who had taken children around the Houses of Parliament said that it had been a
“fantastic experience that allowed children to have firsthand experience of how the Houses of Parliament work. It was great for them to see it as a working building—online it is static and empty. They were very much struck with awe and wonder.”
Engagement with children is the future of our politics.
Diana Johnson (Kingston upon Hull North) (Lab)
Will the hon. Gentleman confirm that it is very important for children from outside London, particularly those from my constituency, to be able to come and see what goes on in Parliament, and engage with the democratic process? Can he tell us when the first sod will be turned, so that we can have the centre as soon as possible?
John Thurso
I cannot at this moment give the hon. Lady an exact date, but it is hoped that the centre will be open in 2015, probably just after the election. As for her first point, as one who represents the most northerly constituency on the mainland of the United Kingdom—and long may it remain united—I must say that it was a tremendous pleasure to welcome children from Kinlochbervie and Wick high schools two weeks ago who made two separate visits. I am sure that we wish to continue to do everything possible to enable constituencies such as hers to benefit from these resources.
Tributes to Tony Benn
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
On Monday 17 March, I informed the House that there would be an opportunity today for right hon. and hon. Members to pay tribute to the right hon. Tony Benn. I call the Deputy Prime Minister, Mr Nick Clegg.
The Deputy Prime Minister (Mr Nick Clegg)
May I, on behalf of the House, commence the tributes to the right hon. Tony Benn, following the warm words from the Prime Minister and the Leader of the Opposition yesterday?
As others have already commented, Tony Benn will be remembered as a dedicated constituency Member of Parliament, a tireless campaigner and, of course, an astute political diarist. He once described being an MP as the only job with 70,000 employers and only one employee. Our sincere condolences go to his family—including, of course, the right hon. Member for Leeds Central (Hilary Benn)—and his friends and colleagues at this difficult time.
Countless people, regardless of whether they knew Tony Benn well personally or by reputation alone, have spoken of his kindness, charm and sense of humour. It was these qualities which, among so many other achievements, helped him get the better of Ali G in a way that very few people have before or since. I am sure I am not the only one who remembers watching and admiring Tony Benn in that interview.
Many of the battles Tony Benn fought were very much of their time, such as for renationalisation and turning back the tide of globalisation. Yet on so many other issues, Tony Benn was far ahead of his time. This includes his passionate commitment to protect civil liberties, promote equality and secure political reform in Britain; I could have done with him being here when we last discussed House of Lords reform. His campaign against Britain’s membership of the European Union—something I, of course, did not agree with him on—will loom large in this year’s European elections.
Above all else, Tony Benn was a dedicated democrat. He never forgot the struggles of those who, down the years, have fought for the right to vote, speak and be heard, as his now famous memorial to the suffragette Emily Wilding Davison in a broom cupboard nearby so wonderfully demonstrates, and this uplifting idea to help people realise the power they have to change the world for the better will be his lasting legacy.
Everyone who heard Tony Benn speak, whether they shared his views or not, could not help but admire and learn from the passion and conviction he brought to the causes he believed in. Over his lifetime, Tony Benn went from being vilified to being lauded by the press; perhaps there is hope for all of us. [Interruption.] Okay; perhaps not. He had mixed feelings about this. He once said:
“If I’m a national treasure in the Telegraph, something’s gone wrong.”
This modesty and humour was typical, but as I learned as an East Midlands MEP, representing Tony Benn’s constituency in Chesterfield, the public had a deep respect and affection for him. He had a genuine interest in people and time for everyone he met, and thanks to his diaries people will continue to be inspired by his life and work for many years to come.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
I thank the Deputy Prime Minister for his generous and thoughtful words on Tony Benn.
This is a parliamentary occasion to remember Tony Benn, but it was a parliamentary occasion every time Tony Benn spoke in this House, and before the House was televised I well remember that when we saw the name “Tony Benn” on the monitor we would all stop what we were doing in our offices and rush into this Chamber to hear him. All those who passionately agreed with him and those who passionately disagreed with him would be here to listen.
He was a great orator both inside and outside this House, and what made his oratory great was not just his formidable intellect—although he had that—or his great historical knowledge, although he had that too: it was that he spoke out of conviction and he always spoke from the heart.
He was first elected to this House in 1950 but was concerned that upon his father’s death his inheritance of a peerage would disqualify him from serving his constituents who had elected him to this House. On his father’s death in 1960 he was disqualified, but fought his way back to this House through the Peerage Act 1963 and a by-election.
When Labour formed a Government in 1964 he became Postmaster General and then Minister of Technology, and with Labour in power again from 1974 to 1979 he became Secretary of State for Industry and then Secretary of State for Energy, and he encouraged a number of workers’ co-operatives, the most notable of which was Meriden in the midlands, which continued to produce Triumph motorcycles for another decade.
What drove him on was his belief in the power of people, as the Deputy Prime Minister said: the power of ordinary people, through their trade unions and their votes, to bring about change—and change for the better. His commitment was to the historic fight against social injustice, but he was never locked in the past. He embraced myriad new movements, such as the green movement and the women’s movement. Because he believed in movements—the power of people working together to make change—he was always encouraging people and giving them the confidence that they could do that.
Everyone who ever met Tony has their own story about that, and this is mine. Back in the mid-1980s, as the only woman MP with very young children and finding it quite impossible to cope, I was sitting by myself in the corner of the Strangers caff. It was 11 o’clock at night and we were still waiting for a vote, and I was feeling terrible. Tony came and sat down next to me, and said, “You look exhausted. You should be at home.” I said that I could not go home, because I had not been let off by the Whips. He said, “I can give you a really important piece of advice for your future. You do not have to worry about the Whips; I never do.” So I was sent home to my family by Tony Benn, himself a great family man.
The public know Tony Benn for his passion for politics, but his other great lifelong passion was his family: his wife, his children and his grandchildren. He proposed to Caroline only nine days after meeting her, explaining that it would have been sooner but he was quite shy. He later bought the bench on which they were sitting when he proposed, and it remained in their garden until the end. He was enormously and justifiably proud of his children: his daughter Melissa, so like her mother, and his sons Joshua, Stephen and Hilary, my right hon. Friend the Member for Leeds Central, so like him. His legacy is not just to the House and to progressive politics in this country, but in the values and commitment taken forward by his children and grandchildren, to whom we extend our sympathy and with whom we share the grief of the loss of a great parliamentarian and a great politician.
Sir Peter Tapsell (Louth and Horncastle) (Con)
I am the only Member still in the House who voted in favour of the 1963 Peerage Bill, which enabled Tony Benn to renounce his distinguished father’s Stansgate viscountcy and return to us here. At the time, it was a controversial vote. Earlier, he had been elected as a Member of Parliament at the age of 25, when I, just back from the Army, was in my first year at Oxford. Very shortly after his election he came, in full evening dress, to debate at the Oxford Union. He was strikingly handsome. The president of the Union introduced him to us with the words, “I call upon the honourable Anthony Wedgwood Benn, Member of Parliament, New College, Ex-President, to address the house.” He made a stunning speech. I remember thinking to myself, “How am I ever going to be able to compete with that?” Of course, I never was able to. Very few people were ever able, as orators, to do so.
Tony Benn was always kind to me, particularly at the time of the debates on the Maastricht treaty. I even had the privilege, over the years, of occasionally being invited to drink his strong, unsweetened Darjeeling tea from one of his huge tin mugs: the Benn equivalent of a companionship of honour. In private life, he was a gentle, sweet, charming man, with perfect manners. His personality changed a little when he had an audience to address. He was a brilliant, rather demagogic speaker—fluent, witty, forceful and above all, passionate—as much a master of the public platform as of the Chamber of this House. I would rank him, with Nye Bevan, Michael Foot and Enoch Powell, as the four finest parliamentary debaters during my half century in the House. At his best, he was spellbinding, so that listening to him one was sometimes in danger of being intellectually swept towards some of the wilder shores of politics. Harold Wilson—they were chalk and cheese—famously said of him that he was the only man he had ever known who immatured as he grew older, but that was his great charm: he always retained his youthful enthusiasm and boyish zest, and the conviction that his words could make the world a better place. Those are qualities that many women, in particular, find attractive. My French wife thought that he was delightful and great fun. His enchanting American wife adored him as he did her. Tony Benn was a great parliamentarian and a good man. England will remember him.
Mr Michael Meacher (Oldham West and Royton) (Lab)
Tony Benn was a widely misunderstood and misrepresented man, as visionaries have always been down the ages. But the ideas for which he stood— democracy against corporate domination; national sovereignty against globalisation; transparency of the workings of power; the need for accountability in all institutions; and the rights of the industrial working class against an oppressive economic system—will live on after him and are as vibrant today as they were when he first entered public life.
Tony Benn was the architect of the big picture—the ultimate fundamental goals to which politics should aspire, beyond the day-to-day detail. Like reformers before him, he asked uncomfortable questions and he challenged a cosy consensus in which perhaps too many around him seemed to be cocooned. At its most poignant, he would press whether the Labour party was really fulfilling the role for which it was founded, and whether its MPs and trade union leaders were really accountable to those they represented.
Fundamental to Tony’s beliefs was his insight that real and lasting change comes about only from below; the role of Parliament, all too often, is largely to ratify what was already inevitable. That is certainly proving to be right in respect of the biggest issue in contemporary politics: the clinging on by the political establishment to an irretrievably broken system of neo-liberal market capitalism. The public are deeply opposed to a harsh, unjust and seemingly endless austerity and to its exploitation by a greedy and selfish 1% who are super-rich. But it seems that nothing much is going to happen on that score until there is an explosion in the streets, just like the anti-poll tax riots that brought down Thatcher. Tony Benn would have understood that all too well and he would have agitated for it.
It was that which led him to support many strikes and acts of civil disobedience. His dramatic intervention in the Upper Clyde Shipbuilders strike in 1971 forced Heath to change direction—to move away from deflationary policies and begin to pull unemployment down below 1 million. But of course such things were not always successful. The National Union of Mineworkers strike in 1984-85 was a turning point, both industrially and politically, and Benn lent it his wholehearted support. It is only now becoming fully clear just how far the illicit machinations of a semi-militaristic state were brought to bear to thwart the legitimate rights of the trade union opposing the wholesale closure of the mines. The strike failed, but just as the Astbury judgment and the Trade Disputes and Trade Unions Act 1927 led ultimately to the full reinstatement of the unions’ role in industrial life by the Attlee Government of 1945-51, so the illegitimate use of the instruments of tyranny against the miners three decades ago may yet again see the restoration of the unions to their central role in this nation’s industrial and economic life.
Benn also realised that the Labour party would only ever fulfil its fundamental role in championing the industrial working class if power was shared between the parliamentary Labour party on the one hand and the national executive committee, constituency parties, trade unions and annual conference on the other. The devolving of power to the grassroots—in particular the Wembley conference of 1980 on the electoral college to elect the leader—proved too much for the right wing of the party, which defected to set up its own party, the Social Democratic party, which soared and then crashed. It is often said that that split, for which, on a wholly lopsided view, Benn was held responsible, paved the way for the Thatcherite ascendancy. That is nonsense. Thatcher won the following election in 1983 for quite different reasons. The economy was already recovering strongly after the deep recession of 1980-81, and Thatcher herself had become a transformative heroic figure after the Falklands.
Some unsympathetic commentators have also observed, rather gleefully, that Tony failed in the practical achievement of his goals. Well, here again, I think that Tony may well have the last laugh, as we may, in other respects, see many of his aspirations coming to fruition after his death. Polling shows clearly huge majorities today in support of taking back rail and energy into public ownership, imposing rent controls to stop ever-rising and unaffordable rents, building a crash programme of social housing for the near 2 million households on council waiting lists, cracking down hard on industrial-scale tax avoidance and evasion, and making the 1,000 most ultra-rich persons contribute a fair share of their £190 billion ill-gotten gains in wealth since the 2008 crash, which I might add that many of them helped to cause.
We have also seen mass movements beginning to influence the politics of this country, which certainly reflects the Bennite inheritance. A range of different organisations such as the Occupy movement against the stock exchange, UK Uncut demonstrations against massive tax avoidance and the People’s Assembly Against Austerity all represent collective action from below, forcing issues up the political agenda and compelling those with wealth and power to respond and to make concessions and change direction. They are proving Tony Benn right about how politics is driven.
Asked how he wanted to be remembered, Tony said, “that I have given people hope”. There is already anger enough in this country at how it has been dragged into the deepest abyss for a century. What people want today is hope that a different and better world is possible. Tony Benn, as a charismatic and inspiring leader, gave that hope to millions of people. His unremitting campaigning for the rights of workers, for accountability and for democracy and redress against wealth and power leaves a demand for justice and a legacy of hope that will inspire generations to come.
Sir Edward Garnier (Harborough) (Con)
Had the late Tony Benn been making the speech of the right hon. Member for Oldham West and Royton (Mr Meacher), this Chamber would have been full. I trust that the right hon. Member for Leeds Central (Hilary Benn) will not think me impertinent for intervening. I did not know Tony Benn as well as many Members on the Opposition Benches did nor as well as my right hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell) did, but I want briefly to recognise his huge humanity and conduct as a Member of this House. I did not share his politics—I fundamentally disagreed with more or less everything he ever said—but I got to know his humanity.
After he had left this House, he and I very occasionally spoke on the same platforms—at meetings of Liberty, for example, discussing the previous Government’s proposals on identity cards and other forms of, as we thought, excessive Government interference in the life of the individual. There were occasions when we would walk back from halls to the tube station or bus stop and he would talk to me as if I had known him for ever, utterly without side and utterly unconcerned that I was a member of the Conservative party and he was not, but the occasion I remember most clearly is the one when he stood at that Dispatch Box with his son, introducing him to this House. The sheer pride of a father for his son was palpable. That is evidence, it seems to me, that we were looking not just at the typical two-dimensional modern politician but at the three-dimensional transparent decency of a very great man.
Toby Perkins (Chesterfield) (Lab)
I am incredibly proud, as the Member of Parliament for Chesterfield, to add a few words of tribute on behalf of the people of Chesterfield. I know that many people in the Chamber will have known Tony better individually and others can do better justice to his overall history and politics, but I want to get across why people in Chesterfield felt so immensely proud to have Tony as our Member of Parliament. He arrived in Chesterfield in 1984 and, unusually, at the time he became our Member of Parliament he was already famous. Most new MPs are at the start of their careers, but of course he had had 30 years in Parliament and was already very much a national figure.
His becoming the Member of Parliament for Chesterfield at that time could not have been scripted by a Hollywood director. Of course, we had had the catastrophic 1983 election in which he had lost his seat, and who knows how different the history of the Labour party would have been if he had been in this place for the subsequent leadership contest. Eric Varley, who is also remembered tremendously fondly in Chesterfield, stood down as our Member of Parliament and Tony was the overwhelming choice of the members. The shortlist of candidates was very strong, but he was the choice.
Just days after he became the Member of Parliament for Chesterfield, the miners’ strike started. To be in Chesterfield is to understand the totemic nature of the miners’ strike in the history of the town, because it challenged everything that people in Chesterfield considered Chesterfield to be all about. The work that Tony did with my hon. Friend the Member for Bolsover (Mr Skinner) to support the miners, keep people’s spirits up and show a sense of pride in, and solidarity with, the miners enabled him, as an outsider in a small northern town who did not have a connection with the town, to build up a connection with the town in the space of a year that would otherwise have taken 10, 15 or 20 years to build.
What has come across strongly to me as the Member of Parliament in the past few days is the sense of pride that everyone had in having him as our Member of Parliament. Government Members have said a couple of times, almost apologetically, that they did not agree with much of his politics, but that was the point. He knew that they did not agree with his politics and there is no need to apologise for that. Many people in Chesterfield who also would not have agreed with his politics still had a tremendous sense of pride about having this national figure as our Member of Parliament, and in having someone who had such obvious warmth and affection for everything that a working-class town such as Chesterfield stood for. He was constantly there in the Labour club at weekends, even though he was not a drinker. He would attend the May day marches and rallies that we have in Chesterfield and give the most wonderful inspirational speeches. The right hon. Member for Louth and Horncastle (Sir Peter Tapsell) spoke about how people could be swept away by his spellbinding oratory into almost recognising everything that he said and wanting to jump aboard. I have been at general committee meetings of Chesterfield Labour party when I have thought, “I know I don’t agree with this stuff, but it kind of sounds convincing.” He had immense power and ability, which so very few people have, and which is being strongly reflected here.
The other point that came across when people in Chesterfield came into the Labour club to sign the book of condolences was, yes, we had this national figure, yes, the moment we said “Chesterfield” everyone thought of Tony Benn, but we also had someone who an old lady could come and talk to about what to many would seem a trivial matter. He would stop everything, and for that 10 or 15 minutes, the old lady sitting in front of him was the most important thing in the world. Some people said, “I bet he was interested in huge national causes and changing the face of the Labour party but not in the constituency,” but nothing could be further from the truth. He was absolutely committed to fighting for the individual rights of people who came to see him, and he saw the clear link between parliamentary democracy, the huge state occasions and the importance of this place, and making sure that it meant something for the individuals back in the constituency that he was proud to represent.
One of Tony’s greatest gifts was as a teacher. Whether one agrees with his politics or not, there is a huge amount that all of us can learn. His five questions to the powerful are enduring questions that not just we in this place but everyone throughout the world should reflect on and think about, because they are incredibly important. Those five questions to anyone who is powerful are: “What power have you got; where did you get it from; in whose interests do you exercise it; to whom are you accountable; and how do we get rid of you?” Those questions, in themselves, show the brilliance of the man and that is why Chesterfield was so very proud to have him as our Member of Parliament.
Kerry McCarthy (Bristol East) (Lab)
I too rise to speak as one of Tony Benn’s successors as a Member of Parliament, in my case for the constituency of Bristol East, which he represented from 1950 to 1983, with a brief interregnum when we had the bother about the hereditary peerage and he had to fight two by-elections. He probably holds a record in that he was elected on a by-election when Sir Stafford Cripps retired in 1950 because of ill health, and then fought two by-elections, at one of which he was disqualified. The people of Bristol, South-East, as it was then, knew perfectly well that he was not entitled to be elected to Parliament, but voted for him nevertheless. Two years later, when he managed after a bitter battle to get the law changed and the Peerage Act 1963 introduced, he then fought another by-election, and he also fought the Chesterfield by-election, which, as I said, must be something of a record.
I am also here to speak on behalf of Madam Deputy Speaker, who, I think, first met Tony Benn at the age of 21—when she was 21, not when he was 21; she does not go back that far—and worked for him as an assistant and eventually joined him as a colleague as the MP for Bristol South from 1987.
Tony Benn was a man of the establishment. He came from a privileged—dare I say “posh”?—background. He was privately educated, he read PPE at Oxford, he was president of the Oxford Union, and apart from two years serving in the forces during the second world war, the only other job he held was at another bastion of the British establishment, the BBC. His father was an MP and both his grandfathers were MPs.
Despite that background as a man of the establishment, Tony was also a man of the people. That came out strongly in what my hon. Friend the Member for Chesterfield (Toby Perkins) said. Describing it as the common touch makes it sounds quite patronising, but there was nothing condescending about it. So many people have stopped me in the street in recent days—the same has happened to Madam Deputy Speaker—to offer their personal accounts of his kindness and friendliness. The leader of Bristol council’s Labour group told me about a time he came over to her house. Her two young children had just been given bicycles for their birthdays, and he insisted on riding them up and down the hallway on their tiny bikes. It is little things like that we remember.
Madam Deputy Speaker and others have talked about the contraption he rode around in at election times, a chair strapped to the top of an old Austin Cambridge. He would be driven around the streets, precariously perched on top of the car with a thermos flask in one hand—he was never without his tea—and a megaphone in the other. It is amazing how many people remember him doing that. It is not something I care to replicate—I do not think that I would last very long up there. There is also a brilliant picture of him from 1957, up a ladder decorating the constituency office in just a little pair of shorts. The office needs decorating again, but I do not think that I will be going up a ladder.
I want to mention some of the key things for which he is remembered in Bristol. He supported the Bristol bus boycott in 1963, which was inspired by the civil rights movement in America. There was a colour bar on black workers being employed by the bus company. He was very supportive of Paul Stephenson and others who led the boycott. Eventually, two years later, it led to the passing of the Race Relations Act 1965. People still remember his role in that. He said, “I will not use the buses. I may even have to get on a bike.” He is also remembered for Concorde, of course, the 45th anniversary of which is coming up. A permanent memorial to it will be placed in Filton, just outside Bristol. A civic memorial service will also be held for Tony Benn soon.
In the tributes that followed his death, he was quoted by Madam Deputy Speaker as having advised her, “People will attack you because they want to deflect you. You ignore the attacks and get on with understanding the people. You were put there by the people and they can take it away, so stay close to them.” I think that sums him up. As the Deputy Prime Minister said, he never lost sight of the fact that he was one man with many employers. In that regard, too, he was a man of the people.
My last memory of Tony Benn—I did not know him very well, because our times did not overlap—was when I had the somewhat dubious honour of being invited to be on the Left Field stage at Glastonbury last year. I say that it was a dubious honour because the three of us on the stage were Billy Bragg, who of course is an absolute idol of the Glastonbury audience and a national treasure, Tony Benn, and if anyone could command more adoration at Glastonbury than Billy Bragg it was him, and me, feeling something of a spare part. It took so long for the session to get going because he of course received a standing ovation as he was led up to the stage. So many people wanted to shake his hand and show how much they admired him and respected his views.
He was obviously in frail health and I do not think that he could hear the questions he was being asked all that clearly, but he spoke about the power of politics to effect social change. Those in the audience were probably quite hung over, having been up all night listening to music and doing various other things, but it was clear that he totally inspired them, because despite his physical frailty and advanced age, he was still saying, “You can do something. You can achieve something, just by getting out there and keeping at it.” I think that is his lasting legacy, because he believed in politics. There is so much cynicism about politics these days. He was a rare creature, as he was able to persuade people not to be cynical about politics and to believe that politics can actually change things.
Mr Dennis Skinner (Bolsover) (Lab)
I hesitate to join in this business, because in many ways I thought of Benn in the early Labour party conferences as somebody who, unlike those of us who came from the trade union movement, was part of the English radical dissenting left. He was at that time a member of the national executive committee.
I think there were some significant changes that took place in the early 1970s that changed his life; I may be wrong. In early 1970, when I came into Parliament, we had about five or six years of constant demonstrations. I used to go on these demos, and there would be a gang of people from the TUC—they were all recognisable—and I would be telling Tony Benn all about this. Then I went to Pentonville, where six dockers were in jail because the Industrial Relations Act had been passed—it had got Royal Assent—and they had been on a picket line and they were not supposed to be there. So I went to Tower hill with Eric Heffer, and then Eric said, “Are you coming back to Parliament, Dennis?”, and I said, “No, this is the most important demo I’ve ever been on. The TUC have declared a day of action—who knows what will happen at the end?”, and off I went.
I told Tony Benn all about it the following day, and he said to me, “You know, they might have to get them out.” I thought, “Well, that’s asking a bit too much”, but I repeated it to Eric Heffer and Stan Orme. I said to them, “Those six dockers will be in Strangers Bar tomorrow night”—I thought I would embellish it—and they were. The official solicitor had to go to Pentonville jail and get them out. Is it any wonder that a dissenting English radical began to change his mind a little bit more? That is what really happened.
Then the miners won in ’72, and then they won again in ’74, and we marched again as the people from the Daily Express in Fleet street were cheering from the windows—yes, I said it right: the Daily Express—and Tony says to me, “Look at them at the Daily Express.” I said, “Yes, sadly it’s not the owners, Tony—it’s SOGAT and NATSOPA.” They were heady days. Then there was what happened at the Upper Clyde shipbuilding, which has already been mentioned, and on it went. The truth is that those of us who were in the thick of it knew that it was having a major effect on him. Let us just examine what we are saying about Tony. He was shaped by events all his life. He had an environment that was different from mine as a kid, but then, as I say, it all changed.
Then I got elected to the national executive and he would come armed with amendments every month. I did not have to bother writing amendments; they were already displayed and distributed to the six, seven or eight people who might be allowed to read them.
He was a clever man as well, wasn’t he? That’s what he was—he was clever, and he was industrious. He had got all the abilities. I used to say to him, “By the way, you know about so and so—put that in the diary tonight.” He actually did it on one occasion—he got fed up of hearing me. He said, “Skinner said I’ve got to put this in the diary.”
I had some enjoyable times with him—most of the time; almost all of the time. He was very intelligent as well, you know. He knew all about loads of subjects. He had a pager before MPs had them. He knew all about technology: it wasn’t just Concorde. He knew about it; he probably could have built it. He had a mobile phone before anybody else, and he was talking a language that I still do not understand. He could have built a computer.
He was very knowledgeable—except that he did not know much about competitive sport. I finished up at the Labour party conference—I think it was down at Brighton—and he said, “You’re late.” I said, “I know I’m late, Tony—there’s a reason.” He said, “Yes, there’s a Tory mayor and you didn’t want to be here.” I said, “Well, that’s part of it. But the most important reason is that I was watching Cram and Elliott”—on the telly in the “mile of the century”, as they said. He said, “Cram and Elliott? Are they your delegates?” I said, “Tony, do you know who Ayrton Senna is?” I had watched him win the Formula 1. “Ayrton Senna? Who’s he?”
You had to like somebody like that—somebody who kept all the lists of all the results of everything. You did not have to go far to find out. Now we look for things on the computer. I could ask Tony Benn and he would tell me. I had a lot of enjoyable times with him. He was industrious, he was clever, he was a great diarist—he had a lot of qualities that all of us in our hearts really admire, don’t we, and wish we possessed them all. That is why I constantly wanted to see him in these past few years. I did not see him on the last occasion when he went to Charing Cross hospital, but I did last autumn after the Labour party conference, when I heard that he had been in the hospital, out of the hospital and back in again. I thought I had better go. The day after the conference I went to find him.
In typical Tony Benn fashion, when I got there, room K was empty. I feared the worst, but somebody quickly said, “I saw somebody wheeling him down in a wheelchair.” I went outside and in a lovely little park in the autumn sunshine, just like as in his last book, there he sat in the wheelchair with a fellow who had helped him with some television business or other, smoking his pipe. For three quarters of an hour the Tony Benn I knew and will always admire was sat in that chair, lighting up three times, and we talked about the Labour party conference. It was one that he had not been able to attend because he was in hospital. So I told him the whole story about what happened. It was a bit biased, but he did not mind that. He expected it from me.
Yes, that was the Tony Benn I knew—a wonderful man, and we should always remember that. As for the longest suicide note in history, let me put that to bed. By 1983 the left had lost control on the executive. Check the facts. The chair of the election committee was John Golding. You all remember him, don’t you? The right had taken control. There was only one member of the left on that election executive committee—Eric Heffer, by virtue of being chairman. I wanted to put that to bed.
I also remember what my hon. Friend the Member for Chesterfield (Toby Perkins) said about the election at Chesterfield. What a wonderful campaign. Literally thousands of Labour party members came. I have never seen so many at any by-election. It was great throughout that whole period of two or three weeks. Tony Benn said to me when I met him in Chesterfield market square, “How do you think things are going?” I said, “Tony, we are going to win. We have an army of people coming. We have nothing to worry about. There will be Elsie Tanner, Tony Booth, the vicar from “Emmerdale Farm”—they all came, and I introduced him on the minibus. Then he asked, “Is there anything else I should do, Dennis?” I said, “Yes. Put a tie on. You are the ambassador of a market town.” And Tony Benn—the Tony Benn—turned up the following day in a tie. How could I do other than love the man? [Applause.]
Mr Speaker
Order. A great many colleagues are still seeking to catch my eye and I want to accommodate everybody. I appeal to colleagues to have some regard for the other pressures on our parliamentary day.
John McDonnell (Hayes and Harlington) (Lab)
Tony, along with my hon. Friend the Member for Bolsover (Mr Skinner), founded the Socialist Campaign Group, of which I am the chair. I apologise on behalf of my hon. Friend the Member for Islington North (Jeremy Corbyn), who cannot be here today because he is in Geneva as part of a human rights delegation.
Tony inspired my generation. We did not just respect him; as my hon. Friend the Member for Bolsover said, we loved the man. I want to go back to what my hon. Friend said about the longest suicide note in history, because it is interesting that it has come up time and again among the commemorations of the past week or so.
I want to go back not to the manifesto of 1983, but to Labour’s programme of 1982, which was the Bennite programme, and virtually all of it was written by Tony Benn. It is worth looking back at what it said. It was absolutely prophetic. It basically said, “We will create a society that is more democratic, more fair, more just and more equal.” How would we do it? Tony’s ideas in that programme were straightforward: we would undertake a fundamental, irreversible shift in the redistribution of wealth and power. How would we do that? Through a fair and just tax system, tackling tax evasion and tax avoidance, taking control of the Bank of England, preventing speculation in the City and the banks because it could be dangerous to our long-term economic health, and creating full employment. That is what he was about. That is what he inspired us to do.
It is interesting that he said we should invest in housing, health and education; give all young people the opportunity to stay on at school with an education maintenance allowance; and make sure that they had a guarantee of an apprenticeship or training and the opportunity to go to university, not by paying a fee but on a grant. That was his programme in 1982. It was prophetic and years in advance of its time. He said that what we needed to create the wealth was an industrial strategy—a manufacturing base based on new technology and skills. Actually, I remember him talking in one of his speeches about alternative energy sources, well in advance of the debate about climate change. The programme also included equal rights for women and for the lesbian, gay, bisexual and transgender community.
What else was he committed to? He lost a brother in the war, so he was committed to peace. And bravely, courageously, he called for inclusive talks in Northern Ireland—for everyone to get around the table to secure peace. He also said that we needed to control the arms trade and that no more arms should be sold to dictators in the middle east for them to use as weapons against their own people and to destabilise the region. Of course, he also argued for unilateral nuclear disarmament, which I continue to support and which remains a popular cause for many.
He was a European—sceptical about the European Union, but a true European. I found that inspiring. He inspired my generation and he inspired generations to come. What a world we would have created if we had listened to him. But more important, what a world we can create now if we listen to him.
Solidarity and go well, comrade. You made a significant contribution to all of our lives. I hope we will be able to implement the lessons you taught us, when Labour next gets back into power.
Mr William Cash (Stone) (Con)
I am very grateful indeed for this opportunity to pay tribute to a great democrat and to say how much I appreciated him. Every time he came to the House of Commons after he had left Parliament, I would speak to him in the Tea Room—he loved coming to the Tea Room. He was so amiable and he was a great orator. He was a great democrat and he really believed in this House of Commons.
As a Conservative, I had a completely different philosophy from his background as a profound but great socialist. He was one of the old school, if I may put it that way, ranking with the Bevans of this world and all the really great figures of the Labour party of those days.
I well remember the coal strike. I opposed the closure of the pits when the now Lord Heseltine was the Secretary of State. I took the view that it was completely unjustified. I had mines near my constituency and knew quite a lot about it. Tony Benn got up and challenged Michael Heseltine on his credentials for closing those pits. I well remember that it had the most devastating impact on Michael Heseltine, who sat down, but it got through by one vote, I think, with only four Government Members opposing the legislation. It could be said that some of us take views that are not always those of our Whips or those of our own side, and I must say that Tony Benn took exactly the same line.
I take the point made by the hon. Member for Hayes and Harlington (John McDonnell) about Tony Benn being a true European. I agree, although he was not what some people might take that to mean. I took exactly the same view as him, and still do, about what the European Union meant and means to the people of this country. When he and I shared a platform together in Trafalgar square, he turned to me and said, “Bill, I think you are the only Conservative MP I have ever shared a platform with or ever will.” To me, at any rate, that was a very great tribute.
I remember sitting with Tony Benn in your house, Mr Speaker, and having a conversation with him only a few months ago. He was so delighted to be there, although he was obviously getting much weaker at that stage. It was a tremendous privilege for me to sit down and have a really good chat with him in Speaker’s House about the things we shared a belief in, even though we were completely different philosophically and disagreed with one another on certain matters.
When it came to representing his constituents, or when it came to this House of Commons—I am thinking of his dedication to the ideas of the Levellers—it always struck me that Tony Benn really knew and understood what had happened at the moment when the House of Commons became the House of Commons during the Cromwellian period. He really believed in it passionately, and I will always remember him for his passion, beliefs and conviction. It is a fitting tribute to him that so many people have been able to speak at what is a moment of sadness, but also a moment of pride.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
I first encountered Tony Benn when I was a starry-eyed young activist at mass meetings. He was on the platform and I was among the audience. It is impossible to convey what it was like to be at a mass meeting addressed by Tony Benn in his prime. I would come reeling out the meeting, believing in a new heaven and a new earth. It was truly extraordinary.
As this is a parliamentary tribute, I first want to say—I hope that my colleagues will forgive this old-fashioned phrase—that Tony Benn was a great House of Commons man. He loved the House. He was one of the few people in the House of Commons whom hon. Members from both sides of the House would return to hear speak, because he had such mastery of the Chamber. It is significant that when he was given the freedom of the House, he mainly used it to come back to the Tea Room to meet and talk to colleagues and comrades.
We cannot talk about Tony Benn without mentioning his love of family. I remember that when my right hon. Friend the Member for Leeds Central (Hilary Benn) gave his maiden speech, Tony Benn sat a few Benches in front of him, and as Hilary spoke, his face streamed with tears. It was the most moving thing. It would also not be right to talk about Tony Benn without mentioning his wife, Caroline, because she was not just his life’s partner but his comrade in arms. To my mind, he was never quite the same after her tragic death. Some of us used to tease him about my right hon. Friend, suggesting that my right hon. Friend was perhaps fractionally less left wing than he was himself, but he would just smile serenely and say, “Benns move left as they get older.”
People have spoken about what Tony Benn believed in, and about whether he was right or wrong. I would say that very many of his ideas have stood the test of time. He believed strongly in parliamentarians and MPs being a voice for the voiceless. Many black and minority ethnic people have said to me, “Please let people know how much black and minority ethnic people loved Tony Benn.” That is because they saw him as a voice for people who did not otherwise have a voice.
On civil liberties, he has largely been proved correct. On the Iraq war, on which he made some of his most moving speeches in this House, he was certainly right. He talked about inclusive talks with Northern Ireland. At the time, he was accused of being a loony for talking about that. It is now completely mainstream.
For his critique of the markets, he was judged to be
“the most dangerous man in Britain”.
After the collapse of Lehman’s, can we say that he was completely wrong to criticise the working of markets and market-based mechanisms being the main organising factor in our society?
Trade unions are a hugely unfashionable subject, but I would argue that if we had stronger trade unions today, we would not see the super-exploitation of immigrant workers, we would not have seen the rise and rise of agency workers, and we would not see the abuse of zero-hours contracts. I think he was right in always wanting to stand up for the right of ordinary people to organise in the workplace.
I would call myself pro-European, but his cynicism about the European project and his undying concern about the lack of democratic accountability in European institutions have been proved correct. Anyone who saw what happened to the Greeks last year, when a handful of Brussels bureaucrats were almost able to run their country, must remember some of the things that Tony Benn said about the EU.
Finally, we live in an era when very many people—particularly younger people—are cynical about politics. We live in an era when politicians are cynical about politics. Too many people on both sides of the House study polls and endeavour to repeat back to people what the polls have said they believe. Tony Benn believed in a different type of politics, in which people knew what they believed and were prepared to argue and campaign for difficult and initially unpopular causes for however long it took. Some things have been said about him that are not quite right—that he was divisive and that he was this, that and the other. Tony Benn did not just inspire the generation of political activists of my hon. Friend the Member for Hayes and Harlington (John McDonnell); he continued to inspire generation after generation of young activists, because he was a man who stood up for what he believed and a man who was willing to fight the fight even in adverse times.
Tony Benn was an inspiration to me, and I am very grateful to have been able to make my own small tribute.
Paul Flynn (Newport West) (Lab)
It was a heart-sinking moment when Tony announced that he was leaving the Commons, but he did not retire from his convictions—that is not part of the Benn DNA.
We are right to see Tony as somebody who did not allow himself to be tyrannised by the traditions of this House. This morning is a unique occasion in many ways. Thanks to you, Mr Speaker, we are allowed to express, as every human community wants to do, our regret, admiration and gratitude. In the past, there was just a bald announcement when we lost a Member or a former Member; there was no chance to pay the sort of marvellous tributes that have been paid this morning.
I want to make one point, which is about the contribution that Tony made to trying to change the face of this place, including the way it looks. Aneurin Bevan gave this advice to working class MPs who came here: “When you walk down the corridors of power, you are walking in the dust of history, but it is not your history; it is not the history of your class or your people.”
Against all the rules, Tony fixed up a plaque to Emily Wilding Davison. No one allowed him to do it. He went around with his screwdriver and installed a plaque that he had made himself in a much sought-after spot in the House where people like to go. He did the same for other celebrated people. He spoke too of the many who not only were not friends of democracy but who actually obstructed the democratic process but who are recorded and celebrated in statues and other works of art throughout the House.
Some time ago, when a new name was sought for St Stephen’s tower, Big Ben, some people suggested that we should call it the Chartist tower, or the Suffragette tower, or, even better, Big Benn. Alas, we did not.
I rejoice in Tony Benn’s final book. We remember that lovely evening in your house, Mr Speaker, when we heard him speak about “A Blaze of Autumn Sunshine”, which was an inspired title. The book was lovingly edited by Ruth Winstone and is a story about the purgatory of the human condition. It is a story about this House, written in a manner superior to any other—yes, the dark side, the malice and the treachery are there, but those long pages also express the nobility of the political vocation that we all have. That is something that we should bear in mind.
He had a marvellous career. It is with great sadness, but also celebration and gratitude, that we say: “Farewell, Tony—orator, teacher, friend, inspirer. Rest in peace, comrade.”
Katy Clark (North Ayrshire and Arran) (Lab)
Thank you, Mr Speaker, for giving us the opportunity to say a few words in tribute to Tony Benn today.
I only met Tony Benn when I was elected as a Member in 2005, but I had heard him speak and seen him at labour movement events over two decades. I probably first saw him speak in Ayrshire during the miners’ strike, but I saw him regularly at events in Scotland over many years, whether in Ayrshire, Edinburgh, Glasgow or Aberdeen. He was a man of huge energy and an inspiration to many people of many generations.
It was a pleasure to listen to what the hon. Member for Stone (Mr Cash) said about the miners’ strike. I come from the south Ayrshire mining communities, and when I was at school there were 10,000 miners working at the Killoch pit in south Ayrshire. That pit closed as a result of Government policy, and Tony Benn was with us, along with my hon. Friend the Member for Bolsover (Mr Skinner), who will recall attending a number of rallies in Ayrshire in defence of ordinary working people, particularly the miners in the south Ayrshire coalfields. Tony Benn was there standing up for communities, wherever they were, when they needed him.
Tony Benn would always speak about his connections with Scotland. We have heard a number of references today to English social history, but when he came to Scotland, he spoke about his connections to communities there. I believe that his mother came from Paisley, and that one of his family members was the Member of Parliament for Leith, and he would speak about that when he came to Edinburgh. Of course, his wife, Caroline Benn, spent a great deal of time in Ayrshire, particularly in Cumnock, researching the life of Keir Hardie, who was born in Cumnock and spent a great deal of time in both south Ayrshire, where he was born, and north Ayrshire, where he was a miners’ agent and a journalist for the Ardrossan and Saltcoats Herald. Tony Benn knew all about that—he knew about the history of the social working class and the Scottish working class, and he would speak about that when he came to Scotland.
I saw him speak on many occasions. He was clearly an incredibly inspirational speaker who knew how to connect with ordinary people and speak in a language that they understood. Perhaps not many of us can do that, but he was clearly a wonderful example of it.
The significance of Tony Benn is that he believed that another world was possible. He believed that the way in which we organised our society is not the only way that we can do so. He was interested in history because he believed we could learn from it, and that we had changed the world because we had believed it was possible to do things better. When he came to Ayrshire, he would talk about thirlage, which was how mining communities operated in Scotland—you were not born a slave, but if you went to work in the mines, you did not have the right to leave. It was this House that voted through the thirlage Act, which meant that if you escaped for a year and a day, you won your freedom and did not have to return to the gated communities of the mines in Scotland. Tony Benn would speak about things like that. He would inspire people and try to make them understand how we could actually get social change.
I spoke at the Oxford union a number of weeks ago along with my hon. Friend the Member for Islington North (Jeremy Corbyn), and we were successful that evening in our debate about whether socialism worked or not. A young comrade in the audience reported to Tony Benn what had happened that evening, and I got a text saying that Tony had been delighted to hear that 65 years after his presidency, the Oxford union had eventually come round to his way of thinking. I say that because one thing that amazed me about Tony Benn was the relationships he had with so many people, and the fact that a young student from Oxford would go to see him to tell him about an event he had been to. Tony Benn was interested in everybody and in every cause. He continued to be involved in setting up organisations and trying to organise people for a better world, whether for a small or large group of people.
The Deputy Prime Minister said he thought that some of Tony Benn’s causes were causes of the past, of nationalisation and looking at globalisation, but I think the complete opposite is true. The more we look at what Tony Benn said—not just Tony Benn but others who have spoken about such issues and the way that markets and our country operate—the more that over time I think we will realise that in many ways he was right when he questioned whether we actually live in a democracy. We will see that voting every five years is not what democracy is about because we need a lot more than that. I believe that if we look at the ideas of Tony Benn, we will have the kinds of ideas we need to create a true democracy in this country.
Ian Lavery (Wansbeck) (Lab)
Last week was a really sad, bad week. It started with the sad loss of a great comrade and great friend of Tony Benn’s, Bob Crow. Tony sadly passed on, and just at the weekend so did another close friend of his, Stan Pearce, a man who worked hard in north-east England as a miner. It was a really bad, sad week for lots of people with regard to untimely departures.
Tony was fond of saying that Labour MPs normally started on the left and ended up in the Lords, while he took the opposite path in his political career. I first knew Tony when I was a young miner. I was 19 years of age in 1984 in the lead-up to and during the miners’ strike, and he was such an inspiration. I have heard lots of Members speak today, and most have said, “Tony was a great man although we did not agree with a lot of what he said.” I am probably the only one who will say that I agreed with most of what he said, and he was a tremendous inspiration to me. The support he gave to the miners has been mentioned in many contributions, but his support for the working class and people in dispute was absolutely fantastic and unswerving.
Tony Benn became very friendly with me, my wife and my kids as well. I knew Tony personally and he was a really good friend and comrade. He was somebody who I began to have a great liking for many years ago, and when anybody asks me, as an MP or a trade unionist, who my inspirations were in life, Tony would certainly be No. 1—perhaps No. 2, depending on what my hon. Friend the Member for Bolsover (Mr Skinner) had said in Parliament the previous week.
Tony Benn was a brilliant, fantastic orator and he could change people’s minds—at least for the time they were in the room anyway. It is a shame that people did not take Tony’s views away from the meetings he so eloquently addressed. He was a man of tremendous kindness, and that goes right through Tony’s family through his children. We used to be delighted if we could get Skinner or Benn or someone like that to the coalfield. We used to pack the halls to the rafters and enjoy every single moment. We admired them so much, and they oozed a natural presence. We wanted to be so much like them. Unfortunately, I have not in any way achieved anything like that at this point in time. They were dark days in the mining communities, but Benn was there and he made sure that people were revitalised and back up for the battle.
He had a tremendous affinity for the north-east. He was a major speaker at the biggest trade union gathering in Europe, the Durham Miners’ Gala, on more than 20 occasions—more than anyone else, perhaps other than my hon. Friend the Member for Bolsover. He spoke at all the events. He understood the culture of the work force of the north-east, and he understood the traditions and the culture of the people of the north-east. He was a personal inspiration. Quite simply, Tony Benn was a legend and a giant among men.
I read with great affection an article written in the moderate Morning Star only this week by my hon. Friend the Member for Islington North (Jeremy Corbyn) about when they put up a plaque for Emily Wilding Davison in a broom cupboard in the Crypt. The connection there, of course, is that Emily Wilding Davison was from my constituency all those years ago. It is amazing to think of Tony and Jeremy hiding with a drill in the broom cupboard in the Crypt screwing the plaque behind the door, but it was worthy of Tony’s belief in fighting with every fibre of his being for equality and against injustice. Miners, trade unionists and workers across the globe have had their lives enriched by just knowing Tony and understanding the support that he gave them. Together, we all pass on our condolences and sympathy to Tony’s family. We understand how much of a family man Tony was and how much he loved his family.
I conclude with the great song of days gone by: simply the best. He was, perhaps, better than all the rest.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I am very glad to be called to pay personal tribute to Tony Benn and to pass on the thanks of many of my constituents who were inspired by meeting him during the miners’ strike and before that.
I have to say that I did have a cat and he was called Tony Benn, and he was just as feisty as the person he was named after, whom I did admire greatly. If we went on holiday and put him in a cattery for two weeks, he would then disappear for about two weeks just to get his own back, causing my wife a great deal of distress. Tony could also trouble people. Some people never recovered from being challenged by him, because they did not have the logic to stand against him.
I will tell one story. It has been said that Tony was great with technology. I am an honorary member of the Free Colliers, an organisation in my constituency set up after the 1799 Act that freed colliers from bondage in Scotland. The Act provided that if they were found meeting other colliers to discuss terms and conditions of employment they would be returned to the colliery from which they were freed. The Free Colliers march every year to commemorate setting up this secret society, which was a precursor of the National Federation of Coal, Iron and Lime Miners, which became the National Union of Mineworkers. Tony always said that he wanted to come and I gave him some material on it for him to read. One day we met at the ATM in this building and he started to discuss it with me. Having got some money out of the machine, he did not take it and for some reason it swallowed his money. He was totally perplexed—he could not understand where his money had gone. Although he knew about technology, even he was befuddled by that. I hope he got his money back. He was always willing to enter into a debate on important topics, sometimes in the strangest places.
The Free Colliers were very sad that Tony Benn never went to speak to them. They said that they had always wanted him to go and address them, because they held him in high regard. He was held in high regard outside the House: that is the point about Tony Benn. He was held in high regard here, by us who view things through the prism of Parliament, but people outside took a much wider view, and his heritage will last a great deal longer outside, affecting and influencing politics in the outside world. I thank him for his clarity of analysis and his support for democratic solutions. He always looked for the benefit of all in everything, even if that meant that he had to challenge the compromises of the establishment.
My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) mentioned Upper Clyde Shipbuilders. In 1971, I was the president of Stirling university students association. There is a BBC video—I have a copy; I hope that it is the master copy—showing me in my office with long hair and a Karl Marx poster behind me, calling for the students to organise buses so that people could go and stand by those who were “working in” to save their jobs. That was the first occasion on which I met Tony Benn. I did not get to know him, but I met him, and found him a great inspiration.
When I was the leader of Stirling council, we changed the standing orders—which had to be approved by the national executive committee—to bind councillors to the manifestos on which they stood. There is a unique idea! Imagine making people carry out the manifestos on which they stand! Tony persuaded the national executive committee to approve our standing orders, and they became the standing orders of our council, which meant that we had to deliver on the manifestos on which we had been elected. Unfortunately, being Tony Benn, he decided that this was the solution for all councils, and tried to introduce the same standing orders for every council in Britain. Of course, that frightened the horses and it never happened, but at least those in my council, during the 10 years for which I was leader, were bound by the manifestos on which we were elected, and that was approved by the national executive committee of the Labour party. Would it not be wonderful for every aspect of politics if everyone stood for election on that basis?
I became the Scottish secretary of the Labour co-ordinating committee, which had been set up by my right hon. Friend the Member for Oldham West and Royton at a meeting in Glasgow—on his son’s birthday, if I remember rightly. He had to rush back home after launching it. It was a bulwark against Militant, the ultra-left of the party. It was not an attack on the establishment, although some people saw it as such; it was an antidote to the anti-democratic, out-of-touch elite that ran the Labour party. For instance, I was nominated by my constituency’s branch of the GMB, which sent the form down to the national office. When it came back, my name had been not taken out but scored out, and someone else’s name had been inserted and signed by the national secretary of the union. That was a total denial of the democracy of the people in Scotland who had chosen me as a candidate. I won anyway, and I am here as a consequence, but Tony Benn was against what had happened in that instance as well.
Some people later tried to distance themselves from the distorted “bogey man” image of Tony Benn by saying that they were not Bennites, but belonged to some other kind of “left”. If I had been asked, I would have said that I was of the Bennite left, because that Bennite left was not militant, it was not Trotskyist, and it was not a compromising position in the Labour party. I hope I still stand by those principles today in the things I do, including wanting Trident to be banned. Tony wanted that, although his intelligence and logic had led him to support nuclear power. The anti-Trotskyite movement in Scotland saved the Labour party in Scotland in the 1980s, and was the driver for the devolved Parliament that we have today. All that was a part of the philosophies that Tony Benn understood. He understood Scotland in a way many politicians down here did not.
I was speaking to Tony Benn’s son Stephen last night in Portcullis House, and I now want to say a few words about the other part of the Bennite heritage. My wife Margaret Doran and I—
Mr Speaker
Order. I must ask the hon. Gentleman to be very brief. We should be grateful for a very few words on that point, because others wish to make contributions, and we need to move on.
Michael Connarty
I am conscious of that, Mr Speaker, but I am talking about a long life and a long friendship.
My wife Margaret Doran and I also knew and dearly admired Tony Benn’s wife Caroline. She was a great inspiration and support, and was a vibrant, lucid and deeply compassionate educationist. She was president of the Socialist Educational Association, and my wife and I have both been, at different times, presidents of the Scottish SEA. We often talked to her at length when we came to London for SEA meetings. I was with Tony and Caroline on the Terrace shortly before her passing. I agree with what was said earlier: a light went out of his life when Caroline died. But what was amazing was that he went on. Many of us would have been destroyed by losing such a life partner but he was inexorable, and that was a tribute to what they both stood for together and what their family stand for and what will be carried on.
When he left Parliament he spoke from outside this House. People have said he left politics. He did not leave politics. His thoughts reflect where the people are. Most of the people in this country are not with us in this House: they do not regard us highly; they think we are often irrelevant to their lives. They go day to day trying to make ends meet and they look to the words of Tony Benn and people like him to give them hope. If we could learn something from him and reconnect with those people we might actually carry forward something that would be beneficial to this House. That is what Tony Benn has given people: hope, and we are not giving people hope at this moment. Maybe in the future it is his words that will give them hope, and not ours.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I am grateful to have the opportunity to speak in this special and important debate, and I want to say a few words of my own and put on record the thoughts of the members of my local Labour party, the constituency and my family on Tony Benn’s sad passing and send our very best wishes to his family, not least my right hon. Friend the Member for Leeds Central (Hilary Benn), whom I am sitting next to today.
Tony Benn was more than just a politician. I believe he was a man who truly wanted to change Britain, and in his own way he did. One aspect of his legacy that has been discussed today is how he stayed in touch with people—and people across generations. He truly cared about whoever he came across. I was lucky enough to meet him on a few occasions, the last one being when he came to the House to listen to the tributes to Nelson Mandela.
I want to share a couple of stories about him. The first shows how his diaries reached the front rooms of many households across this country, not least my own. My sister, Neeraj, absolutely loved his diaries and there have been several Christmases in the Malhotra household where her favourite extracts have been played to everybody.
He was also a serious democrat and he wanted people to understand politics, not just be told about politics or be told what politicians thought. He wanted politics to be done with people, not to people. His sense of commitment to different generations was also marked in a conversation I had recently with pensioners, who spoke of how they would pack out the town hall teas he held every year. The fact that people who were not interested day to day in politics were completely interested in everything he had to say, in that spellbinding way in which he said it, is truly a tribute to the man.
Politics is nothing if it is not for a moral purpose. Whether or not people agreed with how he went about his politics, they cannot deny what he stood for and what he fought for: liberty, equality, democracy. He was a man who had a true passion for progress. He was a thoughtful man and a kind man, and a man who lived what he believed, and a man who, in my view, truly touched the heart of this nation.
Hilary Benn (Leeds Central) (Lab)
First of all, may I say on behalf of my sister Melissa and my brothers Stephen and Joshua and the whole family just how much the words we have heard today mean to us?
I do not propose to add to what has already been said, and indeed written, about my father’s political legacy—apart from anything else, everyone already seems to have their own opinion, as today’s debate has demonstrated—but I do want to say a few words about what Parliament meant to him, because it was the centre of his very long life. He won 16 elections, proudly representing first Bristol South-East and then Chesterfield. Fifteen of those elections enabled him to walk through those doors and take his place in this Chamber. One of them—the by-election he fought after the death of his father—did not. He was barred from entry to the Chamber on the instructions of the Speaker because, it was alleged, his blood was blue. His blood was never blue; it was the deepest red throughout his life.
That moment taught him that the right of people to choose who will represent them here in this place—the very foundation of our democracy—was never, ever granted by those in power. It had to be fought for. That is why democracy is so precious.
His fight to stay in the Commons had, I think, a marked and profound effect on his life. It was why he was so determined to support others in their struggles: to bring an end to apartheid and the death penalty; in support of the miners, as we have heard; and to campaign for peace, because it was war that had taken from him his beloved elder brother Michael.
It was also why he was so determined to commemorate in Parliament the history of those struggles because, as he would often say, all change comes from below. That is why, as we have heard from many Members today, he went down into the Crypt with his screwdriver and put up that plaque in the broom cupboard. He wanted to teach us: why did that brave suffragette spend the night in the broom cupboard in 1911? The answer is because it was census night. What do you do in a census? You fill in a form, and she wanted to write: “Name: Emily Wilding Davison. Address: Houses of Parliament.” Why? Because she believed that a woman’s place was in the House—the House of Commons.
He was very fond of challenging those in authority, assisted by “Erskine May”. He once even moved a motion of no confidence in the Speaker. But he also had a great sense of fun. On one occasion, he was part of a group of Labour MPs who had decided to delay a Division in the Lobby because they wanted to make trouble for the Government. The Serjeant at Arms was dispatched in order to investigate and told them that if they did not move he would have to take their names. My father looked at him and, as his diary records, said, “But that would be completely contrary to Mr Speaker’s ruling of 1622.” After the Serjeant at Arms had departed from the fray, Dad turned to his fellow conspirators and, with that mischievous twinkle in his eye, admitted that he had just made that all up but it seemed to have done the trick.
He loved this place, the people who built it and those who help us in our work. He loved the debate and the argument. But he did not idealise Parliament. He saw it as the means to an end: to be a voice for the movements outside these walls that seek to change the world for the better, as well as being a voice for the people who send us here and whom we all have the privilege to represent.
That was the essence of his character. Yes, it was shaped, as we have heard, by events and experiences but also, as for many of us, by his childhood. He was, at heart, not just a socialist; he was a non-conformist dissenter. His mother taught him to believe in the prophets rather than the kings, and his father would recite these words from the Salvation Army hymn, which I think best explain what he sought to do in Parliament:
“Dare to be a Daniel,
Dare to stand alone,
Dare to have a purpose firm,
Dare to make it known.”
If we are not here to do that, what are we here for? Well, he was. He knew what he thought. He was not afraid to say it. He showed constancy and courage in the face of adversity. Whatever the scribes and the Pharisees may have to say about his life, it is from the words and kindnesses of those whose lives he touched that we—those who loved him most—take the greatest strength.
After all, any life that inspires and encourages so many others is a life that was well lived. [Applause.]
Ms Angela Eagle (Wallasey) (Lab)
Today, we have had the chance to pay tribute to the life and work of Tony Benn, one of the greatest MPs and certainly one of the greatest orators of his generation. He would have been gratified that Parliament has had this chance to recall his long involvement in our national political life in this way, despite the fact that he was neither a Head of State nor royalty. He did, however, serve in this place—with a couple of unintended interruptions—for more than 50 years, and was granted the freedom of the Commons when he retired as an MP.
As we have heard over and over again today, we never got doubt or ambiguity with Tony Benn. We have heard many moving anecdotes and tributes to him, and many Members have pointed out that he had strong views, and more talent than most for getting them across to his audience, either from a platform or in a book. He was passionate, and he was a lifelong socialist who never lost his appetite for the battle, even though he waged it in distinctly different phases during his long and fulfilled life.
Tony Benn was an assiduous Back Bencher, and the first to table a motion against apartheid. I last heard him speak during the Remembrance service for Nelson Mandela, held in Westminster Hall at your suggestion, Mr Speaker. He opposed capital punishment, and he championed human rights long before it was fashionable to do so, introducing his own human rights Bill in 1957. He also championed divorce laws, although he enjoyed a 50-year marriage to his beloved wife, Caroline. I can attest to the fact that she was a formidable campaigner in her own right. He was the Peter Mandelson of his day, demanding that Labour modernise its communication strategies, especially where television was concerned, although it is fair to say that his political journey took him in a slightly different direction thereafter.
Tony Benn served, as a junior Minister, as Postmaster General: as a republican, he tried and failed to get rid of the Queen’s head, but he did manage to shrink it down to a much smaller size. As technology Minister, he oversaw the development of Concorde, but I think he tired of the constraints of ministerial office. Instead, he decided that he needed to range more widely to change the political terms of trade by sheer rhetorical force. As we have heard today, he had plenty of sheer rhetorical force. It was for doing that that he came to be regarded by the media as “the most dangerous man in Britain”.
First and foremost, however, Tony Benn revered the House of Commons as the crucible of our democracy, as we have heard over and over again in today’s tributes. He said that it was the place where kings and tyrants could be tamed and revolution averted. This was in contrast to the House of Lords, which he described as the
“British Outer Mongolia for retired politicians”.
His solution to most problems was more accountability and more democracy. Let’s face it, that is never a bad place to start.
Tony Benn fought a determined campaign to renounce the peerage that he had reluctantly inherited on the death of his father in 1960, and it was those sad circumstances that threw him out of the Commons for the first time. His ultimate success in renouncing his hereditary peerage had at least one unintended consequence. The Peerage Act 1963 allowed him to return to the Commons. It also allowed Sir Alec Douglas-Home to renounce his peerage so that he could mysteriously emerge as leader of the Conservative party and succeed Macmillan as Prime Minister, much to the chagrin of Rab Butler, who many still believe was robbed of the premiership in this dubious way. Such was the fuss that the Conservative tradition of allowing leaders to emerge without any obvious voting by anyone had to be abandoned.
Tony Benn was subsequently to lead another successful campaign to extend the franchise of Labour leadership elections beyond the parliamentary Labour party, which was to culminate in the creation of the electoral college at the Wembley special conference in 1981. He lived long enough to see the Labour leadership election franchise extended further to one member, one vote at the special conference that I chaired this March. So it is possible to argue that it was campaigning by Tony Benn that caused the methods of electing the leaders of both the Tory and Labour parties to be reformed, and in both cases it was to move them in a more democratic direction. Of course, his determined opposition to Britain’s membership of what was then called the Common Market helped to give us our first referendum, too.
Tony Benn was a mesmerising speaker in any context: in the Commons; on a platform; and, latterly, on a theatre stage or in the Left Field tent at Glastonbury. He followed in the footsteps of the Levellers and the Chartists. He was a true English radical, evangelising, teaching and persuading generations of left activists about the power and potential of politics to change things for the better. Even when he was making a case with which I did not agree, I marvelled at his formidable communication skills; he had a way of making complex ideas seem simple, and a memorable turn of phrase ensured that his observations stayed with you long after the meeting had ended.
He revelled in social progress. I remember talking to him 20 years ago about the ordination of women into the Anglican priesthood. He had been down especially to watch the first women vicars being ordained and was delighted at the joyful occasion he had witnessed, and he was aware of its significance in the battle for women’s equality. I remember going as a young activist to campaign in the Chesterfield by-election in 1984, in which Tony was seeking to return to the Commons for the second time. My sister, my hon. Friend the Member for Garston and Halewood (Maria Eagle), and I went over to help with a contingent which included Allan Roberts, the then Member for Bootle. Things were looking a bit wobbly and the stakes were high. We were sent off to try to remove from a tower block, strategically placed on the main road into the town, a forest of Liberal posters, which had suddenly appeared, causing much consternation in the campaign headquarters. My sister discovered that the posters were down to a disgruntled Labour voter who had decided to switch sides. This lady had demanded, “Get that Tony Benn down here if you want me to change my mind.” By coincidence, we bumped into him a few minutes later and so my sister carted him off to the woman’s front door. She invited him in and he reached over to an old photograph that she had on her mantelpiece. It was a group shot of Labour politicians and he named every one of them, except one, which he correctly surmised was her husband—a former local Labour councillor. She was utterly charmed, and the Liberal posters all came down and were replaced by Labour ones. The tide turned and it was said that in the Labour club that weekend my hon. Friend the Member for Bolsover (Mr Skinner) started singing again.
The leader of the Labour party has paid a fulsome tribute to Tony Benn. He leaves behind many memories, and his fascinating and honest diaries, a legacy of which we have heard some today. Most of all, he leaves behind his devoted children, Stephen, Hilary, Melissa and Joshua, to whom we extend our sincere condolences. I believe that the tributes we have heard today do a great service to the memory of a great man who lived a long and fulfilled life. May he rest in peace.
The Leader of the House of Commons (Mr Andrew Lansley)
Today, this House has had its opportunity to bid farewell to one of our own—someone who gave so much to this House of Commons and who so passionately believed in the centrality of this House to our democracy. The debate has been full of memories. For one Parliament, I served in this House with Tony Benn. Even then, we knew that he was a great parliamentarian, one of the central parliamentary figures of the second half of the 20th century. I want to add my condolences to his family. There is no doubt that the sense of loss is great when one loses someone whose presence and character has been there throughout one’s life—we feel for them.
As a Member of this House for nearly 50 years, Tony Benn was a champion of the rights of Members to hold the Executive to account. He said in his book, “Arguments for Democracy”:
“We need a strong government to protect us; and those who see that need must also be most vigilant in seeing that it is, itself, fully democratic in character.”
I hope that he would approve and applaud the changes that we make in this Parliament to promote the interests of Select Committees, which he called for in the 1980s, and indeed the rights of Back Benchers.
Tony Benn was also one of the central influences on the character of our modern Parliament, including in his role in the disclaiming of peerages. His views on reform of the House of Lords were trenchant from his early days in the Commons, as the shadow Leader of the House recalled. He consistently believed in the primacy of the Commons and argued strongly for the abolition of the Lords. He said:
“I am not a reluctant peer but a persistent commoner.”.
A commoner yes, but never commonplace.
Beyond this place, his influence was far-reaching. Even for those who did not share his ideology, the power of his speeches, the intellectual challenges of his views and the originality of his world view, provoked, inspired and always engaged.
Tony Benn himself said:
“I think the most important thing in life is to encourage. If anybody asked me what I want on my gravestone, I would like, ‘Tony Benn, he encouraged us’. That would be all I need!”
He can rest in peace in the knowledge that he did indeed encourage generations of his fellow commoners.
Mr Speaker
Right hon. and hon. Members might like to know that Her Majesty has agreed that Tony Benn’s coffin will be brought to the Chapel of St Mary Undercroft, the Crypt chapel, on Wednesday afternoon next to rest overnight before being taken to St Margaret’s church for his funeral service. The Speaker’s Chaplain, Rev. Rose Hudson-Wilkin will undertake an all-night vigil. The private family service to receive the coffin in the crypt will be followed by a period when parliamentary passholders may file past his coffin to pay their respects.
Business of the House
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Mr Andrew Lansley)
The business for next week is as follows:
Monday 24 March—My right hon. Friend the Secretary of State for Transport will update the House on high-speed rail, followed by a continuation of the Budget debate.
Tuesday 25 March—Conclusion of the Budget debate.
Wednesday 26 March—My right hon. Friend the Prime Minister will update the House following the European Council, followed by a motion relating to the charter for budget responsibility, followed by consideration of Lords Amendments to the Gambling (Licensing and Advertising) Bill, followed by remaining stages of the Inheritance and Trustees’ Powers Bill [Lords], followed by a motion relating to the appointment of electoral commissioners.
Thursday 27 March—A general debate on the background to and implications of the High Court judgment on John Downey. The subject for this debate was determined by the Backbench Business Committee.
Friday 28 March—The House will not be sitting.
The provisional business for the week commencing 31 March will include:
Monday 31 March—Second Reading of the Wales Bill.
Tuesday 1 April—Second Reading of the Finance Bill.
Wednesday 2 April—Opposition Day [Un-allotted half day]. There will be a debate on an Opposition motion, subject to be announced, followed by a motion to approve a statutory instrument.
Thursday 3 April—Business to be nominated by the Backbench Business Committee.
Friday 4 April—The House will not be sitting.
Ms Eagle
I thank the Leader of the House for announcing next week’s business. I also thank him for his written ministerial statement on the drafting of Government legislation today. There was great promise in the title given this Government’s woeful record on drafting legislation, but, as usual with this Government, the content was a complete disappointment.
The situation in Ukraine has continued to worsen. Crimea has been annexed and Russian troops appear to have taken control of several Ukrainian naval bases. During Tuesday’s debate in the House, there was cross-party agreement that the UK response needs to be much more robust than it has been so far. Will the Leader of the House confirm that if President Putin persists, the UK Government will support wider economic and financial sanctions against Russia? There is a meeting of European Council leaders in Brussels later today, and President Obama will be travelling to Europe next week. I ask the Leader of the House to confirm that there will be a statement from the Prime Minister on any developments.
I thank the Leader of the House for granting my request last week for an extra Opposition day to help fill the gaping holes in his increasingly threadbare legislative programme. Apparently, the void is now so bad that the Whips have resorted to e-mailing Tory Back Benchers to ask for suggestions to fill in the time. I think they might have forgotten what happened with last year’s Tory Tea party tendency’s alternative Queen’s Speech. Can the Leader of the House tell us whether, apart from our new Opposition Day, the rest of the time will now be filled with Europe, Europe and more Europe? Perhaps he is safer given all the yawning gaps he has left in the parliamentary timetable to us.
After the Prime Minister’s assurances that the House will have a say on his plans to bring back fox hunting, the Leader of the House keeps getting hon. Members excited by announcing unidentified statutory instruments. Can he tell us when we can expect the hunting debate to take place and how he and the Prime Minister will be voting when it does?
This week we learned the breathtaking extent of the hypocrisy on pay shown by this Government. Cabinet Ministers have been approving huge pay rises for their special advisers while imposing real-terms pay cuts on millions of public sector workers. The coalition agreement promised to cut the number, and cost, of special advisers, so may we have a statement from the Government on why they have done precisely the opposite?
Yesterday, the Chancellor delivered the Budget and hoped that no one would notice what is going on with his failing economic plan. He said that he had cut borrowing but now he is set to borrow £190 billion more than he first forecast. He said that the economy would grow by more than 8% but it has grown by less than 4%, and he said that he would eliminate the deficit by 2015 but now he has admitted that it will take until 2018. Only this Government could announce a five-year plan that, as they have now had to admit, is already four years late and only this Chancellor could expect us all to congratulate him for it.
Last night, the Conservative party released an ad that reveals what was really meant by its claims to be the workers’ party a few weeks ago. Even the Chief Secretary thought it was a spoof. The reality is that the Tories are patronising and have an insultingly clichéd view of working people. All I can say is that what was trending last night on Twitter showed their view of workers. Posh boys’ den, No. 10; bankers’ heaven, No. 11. It is all about bingo, this Budget.
I do have one positive thing to say about the Budget. It was good to see the Liberal Democrats’ role in the coalition memorialised with the new pound coin. It has about as many sides as they have Members and it has two faces, just like them.
Last Saturday was the ides of March, and our classically trained Education Secretary took the opportunity to strike. He criticised the number of Etonians in No. 10 as “preposterous” and, after a few glasses of fine wine, he waxed lyrical about the Chancellor’s prime ministerial potential to Rupert Murdoch. I think, Mr Speaker, you would need more than a few glasses of wine to think that.
Mr Lansley
I am grateful to the shadow Leader of the House for her questions, and particularly for her welcome for my written ministerial statement. We are pushing forward with the good law project to improve drafting. I am sure that Members will appreciate that after many years in which there has been a degree of confusion about the distinction in legislation between regulations and orders, we will be clear in future when they are regulations to avoid confusion and duplication of terminology.
On Ukraine, we have had the debate that Members sought, and it was right for us to have done so. In future business, I and my colleagues will ensure that the House is regularly updated and, if it becomes necessary, we will look to secure a further opportunity for Members to give their views on the situation. The House will know that after the Prime Minister secured a strategy at the previous European Council, he will be trying at the European Council today to secure the strongest sanctions as regards the Russians’ interventions in Crimea and their transgression of international law and the territorial integrity of Ukraine. He will get the strongest sanctions for which agreement can be secured and, as I told the House on Tuesday, there will be a meeting of G7 Ministers at the nuclear security summit in The Hague early next week. As I have told the House, I expect the Prime Minister to update the House next Wednesday.
I have to tell the hon. Lady that the business is not light, not least because I have announced in the provisional business for the week after next the Second Reading of two Bills, the Finance Bill and the Wales Bill. I am delighted to be able to say that the Wales Bill is being published and introduced today.
The reference to statutory instruments in the provisional business is simply to give the House an indication of what the nature of the business might be. When I announce the business next week, I will be able to give more details. I can tell the hon. Lady that they do not relate to a change to the Hunting Act 2004. No such statutory instrument under section 2(2) of that Act is before the House. If it is of any comfort to the hon. Lady, if there were it would have to go through the affirmative procedure and would require a vote of both Houses.
I am surprised that the hon. Lady had anything to say on the Budget, because her leader seemed incapable of finding anything to say about it. His speech yesterday consisted of an end-to-end collection of Labour press releases that we had known and forgotten. The first half tried to reheat arguments that had failed in the past, whereas the second half consisted mainly of things that he hoped we would have said in the Budget but that we had not. His principal attack seems to be, “Why didn’t you say this in the Budget, because then we could have attacked it?” I am afraid that that was not very compelling.
We did begin to get an idea of how the Labour party approaches such matters. Clearly, the Leader of the Opposition did not feel able to comment on the most important potential changes to pensions and savings for nearly 100 years. None the less, by the evening a Labour spokesman was on “Newsnight” giving it straight about what the Labour party thinks should happen in this country. I think it went along the lines of, “You cannot trust people to spend their own money.” That is what the Labour party thinks about the people of this country. We trust the people. The Conservative party has trusted the people and, if I may say so on behalf of our coalition partners, the coalition Government trust the people. We have worked together and I am looking forward to hearing the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), further setting out that pension strategy.
The plan is working and we are sticking to our long-term economic plan. The Chancellor of the Exchequer was able to say that the deficit is forecast to have halved by next year and if one looks at the Office for Budget Responsibility’s report one can see clearly that that is because we have taken the difficult decisions. It is not the product of economic recovery on its own, but is principally about making decisions on public expenditure and bringing down the costs of administration and the extent to which the people’s money is taken to pay for public expenditure and borrowing.
One of the most interesting numbers was the reduction of £42 billion in the cost of borrowing. That is a measure of the advance we have been able to make from the position we inherited from the Labour party, which borrowed so much. The Budget will help hard-working people by bringing 3.2 million people out of income tax altogether, with £800 for all basic-rate taxpayers. It is helping businesses to invest through the investment allowances and helping them to export through the export finance changes, and it is helping people to save through the changes in ISAs, pensioner bonds and other measures. It is giving people who have retired and are not in a position to change their circumstances so readily the security not only of the triple lock and the single-tier pension, which mean that they have a secure basic state pension that does not expose them to means-tested benefits, but the opportunity to use the money they have saved through pensions as they see fit to boost their standard of living in old age.
Mark Pritchard (The Wrekin) (Con)
“Absolution”, “Atonement”, “The Pickwick Papers”, “A Christmas Carol” and “Clockwise” were all films made in Shropshire. May we have a debate on making Shropshire the pre-eminent and premier—if hon. Members will forgive the pun—film location in England for British, American and international film makers? That will be good for Shropshire, for businesses and for tourism.
Mr Lansley
I hope that my hon. Friend will forgive me if I am not as knowledgeable on the relationship of the film industry to Shropshire as I should be. That is interesting. He and other hon. Members might seek such a debate, either on the Adjournment or through the Backbench Business Committee. Certainly, there will be other places in this country that also have a lot to say about the film industry, but I hope that it would also be an opportunity to demonstrate what a success this country now is in terms of our film and creative industries, not only as evidenced by the success of the film “Gravity” at the Oscars, to which the British film industry contributed so much, but by so many successful films that are being made in this country with this Government’s support.
Natascha Engel (North East Derbyshire) (Lab)
Both general debates and votes on Back-Bench motions have led to some notable shifts and changes in Government policy, such as the forcing of the Prime Minister to recall Parliament before going to war in Syria, compensating the victims of contaminated blood, taking action on payday lenders, and the Hillsborough inquiry. What, then, is the criteria that the Government use to take decisions on when to listen to Parliament and when just to ignore it?
Mr Lansley
The Government always listen to Parliament, and we are always very clear, often in the debates that take place, about our position. The hon. Lady instanced in a press release of her own that debates on contaminated blood, fisheries policies, high speed rail, metal theft and fuel prices have led to Government responses and changes of policy. She will no doubt have noted in yesterday’s Budget that the Chancellor of the Exchequer announced that the Government will refund VAT on fuel for air ambulances and inshore rescue boats. That, of course, follows a review established after an e-petition on the subject, which had more than 150,000 signatures, and a debate held through the Backbench Business Committee’s decision in the House in July 2012.
Andrew Selous (South West Bedfordshire) (Con)
May we have an early debate on the proposed teachers’ strike for next Wednesday? The National Union of Teachers is calling out on strike many fine and hard-working teachers next Wednesday, which will cause huge disruption to school children coming up to the exam period, and it is difficult for parents to find child care at short notice. Does my right hon. Friend agree that it would be helpful if all parties in the House strongly urged the NUT not to go ahead with that action?
Mr Lansley
I completely agree with my hon. Friend. I hope that between now and next week it will be possible, as he says, for not only Government Members to be clear that whatever one’s disputes may be, it is wrong to pursue those grievances by damaging the education of the young people whom we are there to look after. I hope that the Opposition spokesman will do exactly the same thing and advise the NUT not to proceed with this.
Keith Vaz (Leicester East) (Lab)
The Leader of the House will know that next Tuesday marks the third anniversary of the launch of the responsibility deal, of which he was the architect. He will also know that of the 40 pledges that businesses have to sign up to, none relates to a reduction in sugar. May we have a debate or statement on the progress of the responsibility deal to see whether we can include the reduction in sugar as one of the pledges that should be made?
Mr Lansley
Yes, I am very familiar with that, and I am proud of what the responsibility deal has been able to achieve in terms of the further reduction in salt content and the calorie challenge, which is relevant to the point to which the right hon. Gentleman alludes. The calorie challenge in itself—the reduction of the equivalent of 100 calories per person per day in this country on average—would bring the population to a sustainable weight, broadly speaking. That would make an enormous difference to our long-term prospects on morbidity in older age. There are other responsibility deal achievements that are too numerous to mention, but questions on the levels of consumption of fat and sugars are part of achieving that calorie challenge.
Neil Carmichael (Stroud) (Con)
With the CBI noting that we need even more engineers to strengthen our already powerful, long-term economic plan, may we have a debate to encourage school governors to think more in terms of business links and developing relationships with businesses so that we can get schools to fill these extra engineering places?
Mr Lansley
My hon. Friend is quite right. It is very important that every school should engage fully with local employers and the professional community to get real work connections with employers. As my hon. Friend mentioned, employer involvement in school governing bodies, is one way of achieving that. The Government are funding a range of programmes to encourage young people to consider careers related to science, technology, engineering and manufacturing. The stimulating physics network aims to increase the take-up of physics A-levels, particularly among girls, and the STEM ambassadors programme raises awareness of the range of careers that science, technology, engineering and maths qualifications can lead to.
Diana Johnson (Kingston upon Hull North) (Lab)
May we have a debate in Government time to educate those on the Government Benches that working-class culture is not just about beer and bingo, or for that matter, pigeon fancying, wearing a flat cap or having a whippet? If they are left in any doubt, perhaps a visit to Hull for city of culture 2017 might be in order.
Mr Lansley
I look forward to the opportunity to visit Hull as the city of culture. I would certainly appreciate that, but I am afraid I cannot agree with the hon. Lady on her first point. It does not patronise or disparage anybody to recognise that in a Budget we address the issues that people care about. We talked earlier about Back-Bench motions. There was a considerable Back-Bench effort on the part of Government Members to secure a reduction in bingo duty, and they got what they were looking for. In fact, they got more than they were looking for from the Chancellor of the Exchequer. It is in the context of a Budget that was about supporting hard-working people, not least because all of those who are basic rate taxpayers, by virtue of a personal tax allowance rising to £10,500, will have seen their tax reduced by £800.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I was recently in a pub enjoying a pint with local farmers, and I am delighted that I will go back and do it again. The topic we discussed then was water abstraction and the changes that are coming into force. Will my right hon. Friend find time for a debate to discuss that matter, which was not particularly considered during the Water Bill?
Mr Lansley
My hon. Friend is the very person, in the sense of having recently had a debate on bingo duty. I congratulate my hon. Friend.
My hon. Friend will be aware that the House of Lords is completing consideration of the Water Bill, and the future of abstraction reform may well arise on consideration of Lords amendments on that Bill.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Will the Leader of the House look into the case of my constituent Gordon Mansbridge, who is 90 and has terminal cancer. He flew some 33 Wellington bomber missions from an Italian airbase during the second world war. Sir John Holmes is investigating the possibility of recognition in the form of a medal clasp, but that review is not likely to be completed until the end of the year. Given the circumstances of my constituent, might the right hon. Gentleman explore with the Ministry of Defence whether that could be speeded up?
Mr Lansley
I will of course do that. I am pleased to be able to help the hon. Gentleman in relation to his constituent. In recent years, like many hon. Members, I have appreciated the recognition, through the Bomber Command medal and the Bomber Command memorial here in London, and in other ways, of the courage displayed by those who were part of Bomber Command in the second world war.
Martin Vickers (Cleethorpes) (Con)
North East Lincolnshire council is proposing to close the youth centres under its control, which—needless to say—is extremely unpopular. The overwhelming local view is that the council is not using its resources wisely. This highlights the limited scope local authorities have in determining their budgets, because most of the services they have to provide are statutory. Will the Leader of the House find time for a debate either on giving councils more freedom or on reducing the amount of statutory provision?
Mr Lansley
My hon. Friend will recall the debate on the local government finance settlement, during which it was illustrated that although every bit of the public sector, including local government, must do its bit to pay off the budget deficit we inherited from the previous Government, there are particular ways in which all administrations can focus on cutting waste and making savings in order to protect front-line services. Of course, we are enabling local authorities to keep council tax down. In particular, our “50 ways to save” document contains practical tips and guidance on making sensible savings and highlights how councillors can challenge officers to deliver savings and how taxpayers can challenge councils. I hope that he, along with his constituents, will be challenging his council to protect the front-line services that are most important to them.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
My constituent Robert Barlow graduated with an honours degree and worked for some years as a microbiologist. He was then diagnosed with a serious heart defect and told that his working days were over. He was sent to Atos for an assessment. They stopped his benefits, which ended his access to free prescriptions. He was too ill to appeal. Robert died at the age of 47, struggling to get by. May we please have an urgent debate on the impact of too many of these Atos decisions on sick people, particularly when access to free prescriptions is taken away?
Mr Lansley
As the hon. Lady will know, the House has had many opportunities to debate how we are proceeding with welfare reform, and rightly so. I hope she understands that we are proceeding on the basis of reforming what we inherited, because it was the previous Government who put work capability assessments in place. We have gone about ensuring that they work more effectively for the future, which is a continuing process. Welfare reform, and indeed the need to maintain the downward pressure on what would otherwise be escalating welfare budgets, which were not controlled under the previous Government, is not the issue. We need to focus resources on the people who are most in need, and that is what we are doing. I will talk with my right hon. and hon. Friends at the Department for Work and Pensions about the circumstances of the case she describes—[Interruption.] I completely understand that, but I will talk with them so that she can have a response on the circumstances and how we are addressing those issues.
Henry Smith (Crawley) (Con)
Will my right hon. Friend join me in congratulating Crawley borough council on its plan to plant Flanders and wild flower poppies in every single neighbourhood and park in my constituency later this year to mark the centenary of the first world war? Will he ensure that there are ample opportunities throughout this year for the House to commemorate that most important event in our history?
Mr Lansley
I applaud my hon. Friend and Crawley borough council for the way they are commemorating the first world war. I can remember talking with my grandfather about the great war, so in a way I can conjure up a sense of what it must have been like. Younger generations should also have an opportunity to understand the nature of what happened, the character of those who went from this country to fight and what they achieved. I think that is well worth commemorating. The House had an important and constructive debate on the first world war at the end of last year, and I hope that we will have another opportunity between now and August to debate how to commemorate it.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
On that issue, the European Scrutiny Committee has asked for a debate that would have freed up the Europe for Citizens programme, which is now frozen for the whole of Europe because we are the last country that has not had that debate and lifted the scrutiny. The House has passed a Bill to allow the programme to go ahead, and it has been granted Royal Assent, but it appears that since November neither the Leader of the House nor the Department has been able to find time for a debate to allow the programme to go ahead across Europe.
Mr Lansley
The hon. Gentleman will know that, contrary to some impressions, we have had difficulty scheduling a number of debates on the Floor of the House. I hope that the issue he raises can be considered in one of the European Committees very shortly.
Mr Mark Harper (Forest of Dean) (Con)
I know that the Leader of the House has found time for debates on the Budget, but if he can find more time, I think that the full quotation he referred to earlier could be exposed more thoroughly. It was from a Labour party adviser, who said that
“you can’t trust people to spend their own money sensibly, planning for their retirement”.
He was an adviser at the beginning and end of the previous Labour Government, including several years in No. 10 advising Tony Blair. That sentiment says everything we need to know about that party and about the parties on the Government side of the House, because we trust people to spend their own money sensibly. The more times we say it, the better.
Mr Lansley
My hon. Friend is absolutely right. I wish that we had more time to debate the Budget, not least because the longer we debate it, the greater the chance that at some point we might find out what the Opposition’s alternative would be. I agree about the sentiments of the Labour party, as expressed in the claim that people cannot be trusted to spend their own money. That has been true in the past, is true today and, no doubt, will be true in the future.
Steve McCabe (Birmingham, Selly Oak) (Lab)
May we have a debate on the pressures caused by councils such as Oxford and Newham relocating their homeless people to Birmingham while the Government simultaneously relocate Birmingham’s resources to places such as Oxfordshire and Surrey?
Mr Lansley
I cannot promise a debate on accommodation issues for people who are dependent on local authority housing. Of course, one of the answers to the hon. Gentleman’s point is our ability to build more houses. He talks about Newham. Just imagine what kind of progress we could make with the Government support the Chancellor announced yesterday for substantial additional developments in Barking and Barking Riverside.
Andrew Bridgen (North West Leicestershire) (Con)
The Derbyshire, Leicestershire and Rutland air ambulance flies out of East Midlands airport in my constituency. It is funded totally by charitable donations and saves countless lives across the region each year. May we have a debate on the value that air ambulances add to our emergency services and the impact on them of the excellent news announced by my right hon. Friend the Chancellor yesterday that VAT on the fuel they use will be scrapped, something for which I and many colleagues on the Government Benches have been campaigning for some time?
Mr Lansley
My hon. Friend has indeed fought that campaign successfully, along with other Members, for which I applaud him. As there is a Budget measure providing for the relief of VAT on fuel for air ambulances, I hope that he and other Members might find an opportunity to raise the matter during the Budget debate.
Nick Smith (Blaenau Gwent) (Lab)
May we have a statement on the delivery of the Department for Work and Pensions? Following big problems with the Work programme and universal credit, it now appears that the personal independence payment has dreadful teething problems.
Mr Lansley
We will have an opportunity in the Budget debate to look at some aspects of the Department’s delivery. As its title indicates, the Department is there to get people into work and to reform and improve pensions, and I think that it can be immensely proud of what it has achieved. We have 1.6 million more people in private sector employment—[Interruption.]
Mr Lansley
Of course, because we had data yesterday showing that it has gone up. There are something like 1.4 million more jobs in this country—I will be corrected if I am wrong—and the smallest number of workless households. Our pension reforms, which the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), has been steering through, are delivering for the people of this country the triple lock, the single-tier pension, auto-enrolment and, following yesterday’s Budget, a dramatic new potential for people to use their pensions funds as they think best. We are also ensuring that where we are reforming—this is true of personal independence payments—we are doing so carefully and steadily, recognising where there are difficulties and addressing them.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
On Tuesday, the Work and Pensions Committee published a report which, in addition to reporting on the delays in assessments, also showed that the Department for Work and Pensions is distorting statistics, which is denigrating to people such as the person my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned. The Secretary of State for Work and Pensions has been rebuked by the UK Statistics Authority at least twice. Does the Leader of the House agree that the ministerial code of conduct is not worth the paper it is written on unless it is enforced, and will he report back to the House on exactly what he is going to do about this matter?
Mr Lansley
No, I do not agree with that. I cannot see any evidence that my right hon. Friend the Secretary of State has breached the ministerial code of conduct. There are often, rightly, debates about policy and, indeed, about the statistics that support policy, but I do not see any basis for the accusation that, in using the arguments that he has, he has in any way breached the code.
Mr David Hanson (Delyn) (Lab)
May we have a further debate on the effectiveness of the green deal? In Wales this week, we have had figures showing that with a population of almost 3 million people, only 4,202 green deal assessments have taken place and only 382 projects have been signed off—fewer than 10 per constituency. Providers in my constituency are now saying that the Conservative coalition has wasted two years, with fewer homes being insulated and real damage being done to the insulation industry.
Mr Lansley
I cannot offer the immediate prospect of a debate. In any case, one has to look very carefully at the way in which the green deal is developing. It is developing in terms of assessments, which are not always turning into contracts, but that does not mean that, as a consequence, people are not taking the energy-conserving and carbon-reducing measures that are the basis of the assessments.
Paul Flynn (Newport West) (Lab)
May I refer the Leader of the House to early-day motion 1156?
[That this House congratulates Age Cymru on its timely and vital campaign to protect vulnerable older people in Wales from scams, such as postal scams, nuisance calls, investment scams, fake PPI recovery offers, internet repair scammers, courier scams and internet scams; and calls for the Government to examine the case for drastically increasing the scope and the scale of No Cold Calling zones to protect older people from rogue traders and high pressure salespeople on their doorstep and for internet service providers to work with other service and product providers to supply easily and affordably higher levels of security capable of blocking or quarantining scams.]
The EDM supports the campaign by Age Cymru to draw attention to the many callous and cruel scams against the vulnerable and the elderly to try to rob them. May we have a debate so that we can find out how to publicise the nature of these scams, some of which are very subtle and very clever and which do so much damage and rob so many elderly people of their hard-won money?
Mr Lansley
The hon. Gentleman raises an important point. I recognise that his EDM has secured support from a number of Members on both sides of the House, and rightly so, because it is a concern for our constituents that they are not subject to these exploitative and damaging rogue traders and others. I cannot promise a debate immediately, but I will of course raise the matter with my hon. Friends to see whether they can reply to him and other Members or inform the House a little more about how they are addressing some of these issues.
Mrs Mary Glindon (North Tyneside) (Lab)
Last week the Government announced that they plan to introduce an early access to medicines scheme. Such a scheme was a central point in the recent report by the all-party group on muscular dystrophy. Will the Leader of the House provide some time to debate the scheme, and will he ask the relevant Minister to meet me, patients and representatives from the Muscular Dystrophy Campaign to discuss it further?
Mr Lansley
I will of course ask my hon. Friends at the Department of Health whether they might be able to meet the hon. Lady. I cannot promise an immediate debate, but this is an important issue, and I hope that we may have such an opportunity before too long. The early access to medicines scheme, like the breakthrough fund in America, raises the real possibility that, in addition to what we have already done through the cancer drugs fund, which provides the ability to access licensed medicines, drugs that have evident efficacy and safety can be made available through the NHS, even before the point at which they have been through all the formal licensing processes, for patients who often have relatively few other opportunities.
Kerry McCarthy (Bristol East) (Lab)
The United Nations Human Rights Council is currently in session, as it has been throughout most of March, and there are a lot of important issues on the agenda. Will the Leader of the House advise on whether there will be a mechanism for us to debate what is decided at the HRC? Will the Foreign Secretary be making a statement, or will there be any other opportunity for us to discuss its outcomes?
Mr Lansley
I cannot say that there will be a statement to the House, but I will talk to my hon. Friends at the Foreign Office to see how the House might indeed be informed of the outcomes of the Human Rights Council.
Pensions Strategy
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Steve Webb)
With permission, Mr Speaker, I would like to make a statement setting out the Government’s strategy for future pension provision in the light of the Chancellor’s bold and radical reform proposals announced in the Budget statement yesterday.
Our first priority has been to do the right thing by people who have already retired—people who have spent a lifetime paying in to the system and who now have a right to expect a decent income in retirement. That is why one of the first measures taken by this coalition Government was to implement the triple lock policy, which ensures that the basic state pension increases each year by the highest of the growth in earnings or prices, with a minimum increase of 2.5%. As a result of this policy, the basic state pension is now a higher share of the average wage than at any time in the past two decades. But we also need a system that works for tomorrow’s pensioners. That is why we have introduced the single-tier state pension. This will provide a simple, single, decent state pension, set above the level of the basic means test, so that working people will know what they will get in retirement from the state and can plan accordingly.
We also needed to reverse the decades-long decline in workplace pension provision. With barely one worker in three in the private sector building up any pension provision at all, urgent action was required. That is why in 2012 we began the process of automatically enrolling more than 10 million people into workplace pensions. That programme has been a stunning success. Last week, we announced that over 3 million workers have already been automatically enrolled. Only about one in 10 workers is exercising their right to opt out of the scheme, as most realise that the combination of an employer contribution and tax relief from the Government make this a very attractive proposition. Figures published at the end of last week for April 2013 showed the biggest rise in workplace pension coverage since figures began in 1997, and we expect the figures for 2014 to show a much bigger increase.
We need to make sure that these pension savings are invested in value-for-money schemes that are well governed, and we plan to publish next week measures to deliver this policy goal. We will also ensure that individuals do not build up multiple stranded small pension pots but that their pensions follow them when they change jobs so that they build up a worthwhile sum in their current scheme. In addition, we will create a new “defined ambition” framework for workplace pensions, enabling new forms of risk sharing between employers and employees.
Having ensured that the vast majority of workers build up a worthwhile pension pot on top of a simplified state pension, we now have a new opportunity to think about the choices people have in retirement. In the past, retirement was often a relatively short period of time, and the priority for most was to turn their pension savings into a regular income for as long as they lived. But in a world where people will routinely live for 25 years in retirement, we need to think more creatively and give people new options about what they will do with their own money. In the past, Governments were concerned that if people had freedom over their pension pots, they would run them down too quickly and then depend on state support in later life. The single-tier pension provides a game-changing opportunity to rethink this model. With people receiving a full single-tier pension already clear of the basic means test, the state need be much less prescriptive about how people use their accumulated pension savings.
That is why the Government have announced a plan for radical liberalisation of the retirement savings market with effect from April 2015. Gone will be the detailed rules on how quickly people can turn their pension pot into annual income. Instead, for the first time, we will treat people as adults, giving them the flexibility to choose how best to use their hard-earned savings in the way that suits their personal circumstances. People will still be free to take a tax-free lump sum and turn the balance of their pension pot into an annuity, providing a guaranteed income for life, but they will also be able to withdraw the whole of their pension pot as cash to spend as they see fit, subject only to taxation on the balance in excess of the tax-free lump sum. Or they can decide to allow their money to go on growing, drawing cash as and when they wish, perhaps as part of a phased retirement—something that we have talked about for years and are now delivering. By lifting the rules, we anticipate that industry will respond with new products that meet consumers’ income needs in new and innovative ways.
These reforms will increase the attractiveness of saving for retirement, and will allow people to shape their finances in retirement as they see fit, not as the Government tell them. To support people in making good choices we will introduce a guidance guarantee—a legal requirement on pension schemes to offer all scheme members a conversation about their options with someone who is impartial. This may lead them to take full independent financial advice, or it may enable them to make informed choices without further advice. As a down payment on these increased flexibilities, we will dramatically relax the rules on turning small pension pots into cash and the rules on existing drawdown products with effect from 27 March.
We anticipate that annuities will continue to be an important part of retirement provision and the FCA will continue with its review of the workings of the annuity market, to ensure that consumers get maximum value for money from their hard-earned pension savings. But we also expect that our reforms will pave the way for new financial products which will give people new freedoms over how they turn their retirement savings into quality of life in retirement, as well as potentially link to options for funding the long-term costs of social care.
The pensions system that was inherited by this coalition Government was broken. Declining coverage of workplace pensions and a declining basic state pension meant that mass means-testing had become the order of the day. We were determined to reverse that spiral of decline. We have done the right thing by today’s pensioners by starting to restore the real value of the state pension through the triple lock. We have reformed the state pension to provide a simple, decent foundation for retirement saving and have implemented automatic enrolment, leading already to millions more in workplace pensions. And now we have ripped up the red tape that prevented people in retirement from making their own choices about how they want to spend their own pension pot. This is truly a pensions revolution, and I commend this strategy to the House.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
No one can say that pensions is not a fast-moving and exciting world. The Minister was halfway through his statement before yesterday’s announcements were mentioned. The reason for that is straightforward. The announcements yesterday cannot be bold and radical and also be a logical extension of the Government’s existing pensions policy, as the Minister strains to claim. Let us be clear about that.
There is a wider context to the statement. Given that so much time was spent on the wider pensions strategy, it is surprising that the Minister made no mention of his retreat, so far at least, from clamping down on fees and charges in individual pension schemes. The stridency of the Minister’s statement results from the fact that he knows that on that fundamental issue he has not delivered for the millions of people saving in the new pension schemes for which he claims all the credit. It is important to put that on the record.
We welcome greater flexibility and choice, especially in the announcements— which are easy to understand and the impact of which is easy to interpret—regarding the changes from 26 March this year. It makes sense to allow greater flexibility, particularly for those with small pots, which the new auto-enrolment system is producing. An annuity will not deliver value for money for these small pots, so we welcome the changes. With the increase to £30,000 in the trivial commutation rules and the changes to the number of pots that can be taken in cash, some individuals will be able to take, by my calculations, up to £60,000 as cash. That is to be welcomed.
Let us probe a little more deeply, especially the new developments surrounding the changes from April 2015, which the Minister dealt with in the second half of his statement. He made great play of the fact that there will be a statutory right to guidance via pension providers. We welcome that. It is our policy, which the Government have taken. After all, imitation is the sincerest form of flattery. Is the guidance to be mandatory for all those approaching the point where they turn their pension pot into retirement income? If not, how does it deal with the cardinal feature of the current annuities market, which is that the majority of people do nothing other than take the current offer from their provider? Government Members have gone quiet now. When we get into the detail, which they do not understand, the picture looks a little different.
We need clarity on that guidance. We need to know what protections there will be for savers in the new investment products that are to be developed. What is the track record of the investment industry in delivering innovative new products that deliver value for money at low cost? [Interruption.] The Secretary of State says something but he has no idea of what he speaks.
What will be the safeguards around the guidance? Will it be mandatory? Will it ensure that people get the best possible deal for their cash? These savings measures are supposed to be part of a Budget that is meant to be for savers. Why, then, does the OBR forecast that the savings ratio will fall? Will the Minister tell us what these changes will mean for savings in future? There is nothing in the Budget about the savings ratio. More widely, how many people will continue to annuitise? The Minister talks of a radical liberalisation, but if a significant number of individuals continue to annuitise, surely the priority should be to ensure that that annuity market also delivers value for money.
Finally, the Minister made great play of his defined ambition agenda, which is buried in his statement. How can one develop the collective pensions to which he subscribes when they depend on intergenerational risk-sharing? As we understand it, intergenerational risk-sharing becomes extremely difficult, if not impossible, if people exit the system at the age of 55. On all these questions—the safeguards surrounding the guidance, and the recognition that the Minister has, to some extent, taken our policy, which we welcome—how do these reforms marry with the wider pensions agenda? We look forward to the Minister’s response.
Steve Webb
I am grateful to the hon. Gentleman for his wholehearted endorsement of our plans. The guidance guarantee is as it says on the tin: it is guaranteed. It is a right of members of the scheme. It is a duty on schemes to make sure, for the first time, that people coming up to retirement have a conversation with someone who is independent and who is on their side, and the schemes will have to make that happen. The Financial Conduct Authority will oversee that process. We will look into whether we can involve the voluntary sector and the advice sector in that.
We often hear the phrase “advice gap”. The hon. Gentleman suggests that we started from a blank sheet of paper, but we did not. We started from a situation where many people coming to retirement were making the wrong decisions and buying poor value products. This is the sort of thing that we have had to address.
The hon. Gentleman asks whether the Budget was really one for savers. To me the increase in ISA limits sounds like good news for savers. The new pensioners bond coming in next year sounds like good news for savers. New freedoms for pensioners with regard to how they can use their pensions sounds like good news for savers. Perhaps the hon. Gentleman wanted still more, but I quote to him Dr Ros Altmann, who said that yesterday was like London buses—all the good news for savers came at once.
The hon. Gentleman asked the question I thought he might ask. If I paraphrase it loosely, his question, as a former academic, was on “the consistency of the defined ambition framework with liberalised decumulation”. I think that is what he wanted to know about. It is perfectly reasonable for people to have collective provision in accumulation. People can build up pensions collectively and many people will go on buying annuities. Many people will still want an income, but we are giving them new options. Plenty of people will want a scheme in which to go on investing their money into retirement. That will be their choice. Our whole agenda is about new models and new options, not just going from one extreme to another.
The hon. Gentleman asked about action on charges. I assume that he had written his questions before he read my statement. Given that we gave him the statement well before the speech, I am surprised at that. I confirm that next week we will announce the conclusions and the action we are taking—action to tackle problems that were never tackled in 13 years of a Labour Government.
The hon. Gentleman says that guidance is Labour’s policy. I am delighted to hear that, but why was there none in place when his party was running the country? It is good of him to support the plans.
This is bold and radical stuff. People will have guidance for the first time and new flexibilities. Some Labour MPs are saying that this should be blocked because we cannot trust people to spend their own money. I think we should.
Mr Mark Hoban (Fareham) (Con)
I welcome the reforms announced by my right hon. Friend the Chancellor yesterday and the further detail my hon. Friend the Minister has given today. I urge him not to overlook the Pensions Advisory Service and the Money Advice Service as potential sources of advice for people approaching retirement. How will he take forward discussions with the industry and the regulator to ensure the availability of good quality products for new pensioners that not only represent good value for money but are properly regulated?
Steve Webb
My hon. Friend has great knowledge of these matters from his time at both the Treasury and the Department for Work and Pensions. He is absolutely right to say that we need to make sure that people have guidance that enables them to make informed choices. They will still be able to proceed to formally regulated independent financial advice, but the industry will have to up its game, because now people will have much more choice to take cash, and if they want to take an annuity they will have to be persuaded that it is good value for money. That will be a market impetus to provide better quality products. We have asked the FCA to make sure that a good guidance regime is in place, potentially involving groups such as the excellent Pensions Advisory Service, to which my hon. Friend referred.
Gavin Shuker (Luton South) (Lab/Co-op)
As a result of these changes, will taxpayers pay more or less to the Exchequer?
Steve Webb
The beauty of theses proposals is that individuals will choose: if they want to spread their income over their retirement they will pay less tax, and if they bring forward their cash they will pay more tax. We think people will take advantage of those freedoms, which will bring forward taxation revenue in the shorter term, and there will be a reduction later on. People will be able to make free choices, something I hope the hon. Gentleman is in favour of.
Dr Julian Lewis (New Forest East) (Con)
I am genuinely not sure what the previous position was on whether the pension pots of elderly people going into residential care contributed towards the total assets they were allowed to retain before they got help from the state. If that was separate and did not count, will the fact that pension pots can now be turned into cash disadvantage people going into residential care in terms of the assets they can retain, or will the situation remain unchanged from their point of view?
Steve Webb
The interaction between these measures and the funding of long-term care is important. There are various rules. If someone takes their pension pot as income, it will be counted as income in the means testing for residential care. If they have capital assets, we assess them on a different basis. We have to make sure that these measures are joined up with our policy on long-term care so that we have the right outcome. What we hope will happen is that new financial products will allow people to use their pot to possibly get care insurance as well. The industry has asked for this; now it has to raise its game.
Mark Durkan (Foyle) (SDLP)
Beyond the guidance guarantee, will the Minister assure us that when these innovative products are offered for sale, the regulator will be able to guarantee that it will in effect have pre-assured them, not least regarding the transparency of charging schemes?
Steve Webb
As the hon. Gentleman knows, we are taking steps to make sure that charges in the pension sphere are made much more transparent. Any new products, particularly if they are sold, will be regulated by the FCA. The guidance is simply a conversation, as it were, with someone who will enable people to get basic information. People will still be able to take regulated independent financial advice, and that will be a regulated process.
Paul Burstow (Sutton and Cheam) (LD)
The Minister has rightly championed the triple lock, making sure that the pension goes up by whichever is highest: earnings, prices or 2.5%. That is making a huge difference to pensioners in my constituency and, I suspect, the constituencies of hon. Members across the House. Will he confirm that it is the Government’s intention to make that very important change a permanent feature of the pension landscape so that it gives people certainty for the future? As part of the guidance guarantee, will he ensure that a linkage is made to the duty in the Care Bill to provide information and advice in respect of care?
Steve Webb
I am grateful to my right hon. Friend for making the crucial point about the link between this new freedom and the level of the state pension. If we are able to keep the triple lock going, what will happen with a means-tested earnings-linked pension credit is that there will be more and more clear blue water between the means test and the triple-locked pension, which will greatly reduce the risk of anyone falling back into means testing in retirement. I would certainly like to see that continue beyond this Parliament.
On guidance on care, we will liaise with our colleagues at the Department of Health to make sure we are taking best advantage of this conversation.
Sheila Gilmore (Edinburgh East) (Lab)
Given the track record of the DWP and the Government on universal credit, the employment and support allowance, the personal independence payment and universal jobmatch, I think people might be a little sceptical about a proposal that appears to have been drawn up on the back of an envelope. The Red Book expects the savings ratio to fall from 7.2% to 3.2% by 2018. How will these proposals help savers?
Steve Webb
We heard earlier that these are Labour policies, but now we hear that they were drawn up on the back of a fag packet. Perhaps both statements are true—I do not know. Just to be clear about what the Labour party has been demanding: it has been demanding not a guidance guarantee, but annuity brokers. It wanted everyone to buy an annuity. This is about freeing people up. That is why it will be good news for saving. Let me give the hon. Lady a brief example. Under auto-enrolment, the people most likely to opt out are the oldest—people in their 50s and beyond—partly because they do not want to tie up their money late in life. This will give them a guaranteed return, in cash, within a few years, and we think it will lead to more pension saving and that it will be a boost to savers.
Penny Mordaunt (Portsmouth North) (Con)
The older someone is, the higher their cost of living. Does the Minister agree that our reforms of the state pension and these new freedoms in private provision should result in increased income and opportunities for people in retirement, and that it is therefore vital that they get good quality financial advice?
Steve Webb
My hon. Friend is right. The key word she used was “opportunities.” If people want to take more of their pension wealth earlier in retirement—perhaps when they are more fit and able—they should be free to do so. As she says, however, they need to make informed choices, which is why the guidance guarantee is so important.
Mr Mike Weir (Angus) (SNP)
Although I am generally supportive of the changes to the private pension—they are sensible, especially for those with smaller pots—I wonder what the difference is between one of these new pensions and other savings vehicles. Will there be any impact on the assessment of someone in their late 50s who unfortunately finds themselves seeking means-tested benefits? Will they be looked at differently compared with the current pension plans, given that they will now be able to draw down money at any time and it will no longer be necessary for them to purchase an annuity at the end of the scheme?
Steve Webb
The hon. Gentleman is right to say that we are going to have to think about pensions and retirement saving in a new way. One of the differences between workplace pensions and other forms of saving is the employer contribution. Whereas someone of working age can save through any savings vehicle they like, it is only through workplace pensions that they get not only tax relief but the employer contribution. They will, therefore, remain particularly attractive products, including for people on low wages.
Mr Crispin Blunt (Reigate) (Con)
Thousands of people in my constituency work in this industry, from the blue-chip leaders working for Legal & General and for Fidelity to those working for two companies that have led the way in innovative products, namely Partnership and Just Retirement, whose share prices took a hammering yesterday because of the language being used about the future of annuities. Will the Minister make it absolutely clear that the delivery of good guidance is essential—that would reinforce the position of those who are delivering innovative products—and that annuities will be an extremely important part of the industry in future provision?
Steve Webb
We know that many people will still choose to have an income for life rather than a capital sum, so we do not think this is the death of the annuity. We think it will give a bit of a jolt to the annuity market and make providers do better. For example, Standard Life, a major annuity provider, said yesterday:
“Today’s wide ranging reforms of the UK savings and pensions regime have the potential to provide the simplicity, choice and flexibility for savers we have been calling for.”
A representative of the Association of British Insurers was on the radio this morning, and the providers are realising that this is an opportunity. They will have to up their game, but this is a chance for them to provide new and innovative products and we are happy to work with them on that.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
How will the Government’s measures protect people like a constituent of mine who is a baker in his mid-70s? He had a lump sum pension pot of £250,000 and received independent advice, but that advice was poor and he lost almost everything. He is in his mid-70s and does not think he will ever be able to retire.
Steve Webb
As the hon. Lady knows, there are redress mechanisms for people who receive poor quality independent financial advice. It is a regulated process. [Interruption.] I cannot hear what she is shouting at me. When there is a process of regulated advice, there are compensation mechanisms, which is right and as it should be.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I have to thank my hon. Friend because the statement and what was announced in the Budget yesterday take pensions to a whole new level. Now we have the single-tier state pension, we can free people to make their retirement decisions. Frankly, the Opposition do not seem to recognise the issues that people on defined contribution schemes have had or how annuities have fallen, so I really welcome what he has said today. In particular, will he tell us a bit more about when pensioner bonds will come into effect?
Steve Webb
Certainly. My understanding is that National Savings and Investments will bring forward pensioner bonds next January. The Chancellor has indicated that the gross interest rate will be about 2.8% for a one-year bond and about 4% for a three-year bond, but that will be reviewed later in the year. It depends on market movements between now and then, but it is designed to be a market-leading rate to recognise that people who have worked hard and saved hard should get a decent return on their money.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is interesting that the consultation is coming after the facts in this case. Will the Minister place in the Library a list of all the people he consulted prior to the announcements today and yesterday, as well as the risk assessment of where the Treasury will benefit or lose out from the proposal and, importantly, of the impact on women, because I suspect that women will yet again be net losers?
Steve Webb
There is a risk of being rather patronising to women in saying that giving them new freedoms will somehow result in their losing out. The hon. Lady will have seen that the markets moved following the announcement yesterday, so there is a sense in which such decisions have to be made through a confidential process. We are in constant dialogue with trade bodies and providers, and we will continue to be so. It is a three-month consultation, so we want to ensure that we get it right. On the principle of giving people freedom, she is shaking her head; I think that Labour Front Benchers might support it, but I really cannot tell.
Nigel Mills (Amber Valley) (Con)
I warmly welcome the reforms, which are a great step forward for the pensions industry. The solution to the annuities problem is perhaps more radical than even the Work and Pensions Committee envisaged. May I urge the Minister to make sure that the new guaranteed guidance arrives before people reach retirement age, so that they can have a plan in their mind about what they want to do and what is there for them to choose before they reach that date?
Steve Webb
My hon. Friend is a distinguished member of the Select Committee, which has scrutinised the issues very effectively. He is quite right that the guidance must come at the right time. We want people to think about their retirement planning much earlier. Certainly, when they are thinking about buying financial products—or, in the jargon, decumulating—we need to make sure that there is someone on their side to give them impartial guidance. We will make sure that that happens.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The Financial Conduct Authority is not only a process regulator but a product regulator. Will the Minister ensure that it is seized of the need to look carefully at new, innovative products, because the group of people with whom it is dealing are very vulnerable, and it is important for the regulator to keep an eye on the market?
Steve Webb
The hon. Gentleman is quite right that products must be properly regulated. The difference between the current situation and what we propose is that, under our proposals, before going to independent financial advisers, people are guaranteed to have a conversation with somebody who is independent and on their side to talk them through their options. All too many people simply do not get that at the moment, and they risk making the wrong choice as a result. We will put that right.
Henry Smith (Crawley) (Con)
Despite the Labour party’s scaremongering since the Budget yesterday, will my hon. Friend confirm that other countries—such as the United States, Australia and Denmark—do not restrict access to pension funds for those seeking to access them on retirement?
Steve Webb
Yes. My hon. Friend is quite right. Many countries have different systems, but the presumption that as soon as someone has a pension pot, they are forced to take annual income is far from universal. We clearly need to make sure that people have proper guidance before they do so, but giving people freedom is what my right hon. Friend the Chancellor’s announcement was all about.
Richard Graham (Gloucester) (Con)
I welcome the further detail given by the Minister on the savings and pensions elements of yesterday’s Budget. By contrast, we have had the bizarre spectacle of the shadow Pensions Minister chuntering—yak, yak, yak—like an excited tourist on a Tibetan plateau. Clearly, there are huge elements that will help savers in all our constituencies. Will the Minister say a little more about one of the most important of those elements, which is the axing of the 10p tax rate on savings income of up £5,000, which I believe will affect 1.5 million low earners in all our constituencies?
Steve Webb
Gladly. My hon. Friend is quite right. The Opposition have asked, “Where are the measures for savers in the Budget? How does it help savers?” We have already gone through a list, and he has kindly added another element, which is the abolition of the 10p tax rate. As my right hon. Friend the Chancellor said yesterday, when this Government abolish a 10p tax rate, we take it to zero, not double it as others have done.
BILL PRESENTED
Wales Bill
Presentation and First Reading (Standing Order No. 57)
Secretary David Jones, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Alistair Carmichael, Secretary Theresa Villiers, Danny Alexander, Mr David Gauke and Stephen Crabb, presented a Bill to make provision about elections to and membership of the National Assembly for Wales; to make provision about the Welsh Assembly Government; to make provision about the setting by the Assembly of a rate of income tax to be paid by Welsh taxpayers and about the devolution of taxation powers to the Assembly; to make related amendments to Part 4A of the Scotland Act 1998; to make provision about borrowing by the Welsh Ministers; to make miscellaneous amendments in the law relating to Wales; and for connected purposes.
Bill read the First time; to be read a Second time on Monday 24 March, and to be printed (Bill 186) with explanatory notes (Bill 186-EN).
Mr Deputy Speaker (Mr Lindsay Hoyle)
We now come to the main business of the day, but may I ask for brevity? There are 30 Members down to speak, so I also make that appeal to Front Bench speakers.
Ways and Means
Budget Resolutions and Economic Situation
Amendment of the Law
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ed Balls (Morley and Outwood) (Lab/Co-op)
Yesterday’s Budget was the Chancellor’s last chance to make decisions and announce measures that will make a difference before the general election. For all his boasts and complacency, the Budget did nothing to address the central reality that will define his time in office—the fact that for most people in our country, living standards are not rising but are falling year on year, and that working people will, in fact, be worse off in 2015 than they were in 2010.
Yesterday the Chancellor tried to claim that everything is going well and according to plan, but millions of working people on middle and lower incomes are still not feeling any recovery. Young people stuck on the dole for months are not feeling it. Pensioners seeing their gas and electricity bills rise each year are not feeling it. Parents facing child care costs so high that it barely adds up for them to go to work are not feeling it. People aspiring to own their own home but finding that rising prices have put that beyond their dreams are not feeling it. Small businesses struggling to get a loan from the banks are not feeling it. Nurses who have been told that they will not even get the below-inflation pay rise they were promised certainly are not feeling it.
With wages still rising slower than prices, and working people worse off than they were when this Chancellor took office, the Office for Budget Responsibility revealed yesterday, in table 3.6 of its economic forecast, that real wages will be 5.6% lower in 2015 than in 2010. [Interruption.] I will tell the House what is awful—that people are not better off under the Tories; they are worse off under the Tories.
Andrew Selous (South West Bedfordshire) (Con)
Does the shadow Chancellor agree with the former Labour adviser who said about pensioners last night that
“you can’t trust people to spend their own money”?
Ed Balls
I do not agree, but I will come on to that in a moment.
We will study very carefully the proposals put on the table for discussion. We have just had a statement. The proposals are important, and it is important to have more flexibility and choice. We have been calling for reforms of the annuities market: to be honest, the price of annuities and competition in the market have not been good enough over the past few years. I must say that we all remember the pensions mis-selling of the early 1990s, and we need to make sure that there is a tight grip on tax avoidance. That is why we will look carefully at the proposals.
I must tell the hon. Gentleman that if he looks at table 3.6 on page 87 of the Office for Budget Responsibility’s report on this so-called Budget for savers, he will see that the savings ratio was 7.2% in 2012 and 5% last year and—here is what will happen to savings in the next five years—then goes from 4.1% to 3.6% and down to 3.2%. The Budget for savers will see savings fall every year in the next five years, with each of the figures revised down by the OBR in its latest forecasts. I must say that I am not sure whether this is quite the Budget for saving that it is stacked up to be.
What we desperately needed was a Budget that delivered for the many, not just a few at the top. What a wasted opportunity it was. The annual increase in the personal allowance is outweighed completely by the 24 tax rises that we have seen since 2010. The Chancellor’s welcome conversion to the importance of capital allowances for business investment means that he has reversed the cuts to capital allowances that he made in 2010. Let me tell him what the OBR says in the Budget documents about the overall impact of all the Budget measures:
“The measures in the Budget are, in aggregate, not expected to alter the OBR GDP growth forecast.”
This Budget will have no impact on growth at all.
As for the Chancellor’s 1p cut in beer duty, welcome as it is, it means that people have to drink 300 pints to get one free. This morning’s Tory poster says:
“Bingo! Cutting the bingo tax & beer duty to help hardworking people do more of the things they enjoy”.
How patronising, embarrassing and out of touch that is. The Tory party calls working people “them”—them and us. Do the Tories really think that they live in a different world from everyone else? Does that not reveal just how out of touch this Tory Government are? It is no wonder that they do not understand the cost of living crisis and no wonder that the Chancellor did nothing in the Budget to tackle it.
We are told by the Chancellor that he did not know that the poster was coming out. The Tories’ chief election strategist did not know about the ad campaign that came out straight after his Budget—pull the other one! It gets worse. I hear that the Prime Minister did not properly understand what the Chancellor was saying. Apparently, when he told the Prime Minister that he wanted to cut taxes for Bingo, the Prime Minister thought he was referring to an old school chum: “Hurrah, another tax break for millionaires. Bingo, Bingo!”
It is okay though, because we know that the job of the chair of the Conservative party is safe. No. 10 says that the Prime Minister has full confidence in the Tory party chair. That’s the end of him then! According to The Sun, the Tory party chair is currently on a tour of northern cities, presumably to see how the other half live. I wonder how it is going. Can you imagine, Mr Deputy Speaker? “Goodness me, the houses even have indoor toilets these days.” I wonder whether he is looking for pigeon fanciers up north. My advice to him is to change his name back to Michael Green. That was a bit safer.
The problem with the Budget was not what it did, but what it did not do. Where was the freeze on energy prices that Labour has called for? Where was the 10p starting rate to cut the taxes of 24 million working people? Where was the expansion of free child care to 25 hours a week for working parents? Where was the compulsory jobs guarantee, paid for by a tax on bank bonuses? Where was the cut in business rates for small firms? Where was the new investment in affordable housing? Where was the reversal of the £3 billion top rate tax cut to balance the books in a fair way? We got none of Labour’s cost of living plan to balance the deficit in a fairer way, just more of the same. Working people are worse off, while millionaires get a tax cut—just more of the same from the same old Tories.
Sir Edward Leigh (Gainsborough) (Con)
If I may gently return to the Budget, I understand that the Labour party accepts the welfare cap—that is fair enough—but that it wants to restore the spare room subsidy, which would cost £465 million. Will the shadow Chancellor explain to the House what other bit of welfare he would cut?
Ed Balls
I will. We have said very clearly that we would take the winter fuel allowance away from the richest 5% of pensioners, which would be a saving. We would also invest in affordable housing to get the housing benefit bill down. I do not know whether the Chancellor gets to read the OBR report. I think that he should listen to what it says:
“The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth relative to rent inflation. This explanation is supported by DWP data, which suggest that almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”
People in employment are seeing their wages fall and are having to claim housing benefit. It is no wonder the welfare bill has gone up by £13 billion since 2010.
It was not supposed to be this way. We all remember what the Chancellor promised in 2010: he would make people better off, balance the books by 2015 and rebalance the economy for the future. We know that people are worse off. We also know, after three years of flatlining growth, that his commitment to balance the books in 2015 is in tatters. He does not expect a balanced budget in 2015, but a deficit of more than £75 billion. It is all in the OBR report. There will be £190 billion more in borrowing than he planned in 2010. The national debt is rising this year, next year and the year after.
Mr Stewart Jackson (Peterborough) (Con)
Will the right hon. Gentleman give way?
Mr Jackson
I thank the right hon. Gentleman for his helpful suggestion, but I will ask my own question. As we are on the subject of history and mea culpas, would he like to apologise for running a structural deficit for the entire period of his Government’s administration?
Ed Balls
The Chancellor promised that he would abolish the structural deficit in this Parliament and he is going to fail absolutely. We went into the financial crisis with a lower national debt than America, France, Germany and Japan. The deficit went up because of a financial crisis and the failure of the banks. There was a recovery in 2010 and his failed policies choked it off. That is the reality. Let me tell the hon. Gentleman the facts. The Chancellor has already borrowed more in the three years of this Government than the last Labour Government borrowed in 13 years. Perhaps he should be apologising for his abject failure on the deficit, the debt and growth. That is what we should be hearing from him.
It will take the next Labour Government to clear up the mess left by this Chancellor. The Government have failed to get rid of the deficit. We will have to do the job. That is why we have been clear that we will balance the books in the next Parliament. We will have the current budget back in surplus and the national debt falling as soon as we can and before the end of the next Parliament. We will abolish his discredited idea of rolling five-year fiscal targets, which he never meets, and instead legislate for tough fiscal rules.
I will tell you what else we will do, Mr Deputy Speaker. I hope that the Chancellor will reflect on what I am about to say and think again.
Ed Balls
I do not think he will either. May I ask the Financial Secretary how it is going since his comments on women and the Monetary Policy Committee? Is he still revelling in that? If things were done on merit, he would be out on his ear.
I hope that the Chancellor will think again and join me, the Chair of the Treasury Committee and the Chief Secretary to the Treasury in supporting reforms to allow the Office for Budget Responsibility to audit independently the spending and tax commitments in the manifestos of the main political parties before the next election. We know from the head of the OBR that that can be done. Let us be honest: it is all a matter of political will. The problem with the Chancellor is that he wants to set traps, but he cannot be transparent on the matter of OBR audits. Why does he not think again, join the cross-party consensus and do the right thing?
Mark Garnier (Wyre Forest) (Con)
Why was the right hon. Gentleman formerly so keen that the OBR should not do that? Why did Labour members of the Treasury Committee argue in 2010 that it should not happen?
Ed Balls
The irony is that back in 2011 the Chancellor was in favour of it, and now he has changed his mind. The OBR, which we supported from the outset in this Parliament, has established a good track record, and we are happy for our manifesto to be audited. What is it about the Conservative Front Benchers that means that they are scared of independent OBR audit of their manifesto? Who knows?
I return to the welfare cap, and I will give a bit more detail for Government Members. We have had a lot of tough and divisive talk from the Chancellor on welfare over the past three years, but it cannot hide the fact that social security is up by £13 billion compared with his plans, particularly because of his failure on housing benefit. We have called for a cap on social security spending, and we will support the welfare cap next Wednesday, but we will make different and fairer choices to keep the social security bill down. We will introduce a compulsory jobs guarantee to get young people back to work. We will scrap the bedroom tax, which is not only unfair but could end up costing more money, not less. We will also scrap the winter fuel allowance for the richest 5% of pensioners, get more houses built and tackle the low wages that have pushed up spending on housing benefit. That is the fair way to ensure we get people back to work and get welfare costs under control.
Christopher Pincher (Tamworth) (Con)
What I have heard from the shadow Chancellor reminds me of the words of Errol Flynn, when he said, “I find difficulty in reconciling my gross habits with my net income”. The right hon. Gentleman has just made promises to the tune of £465 million of spending. How is he going to find that money and still not breach his welfare cap?
Ed Balls
When the hon. Gentleman referred to my gross assets, was he making a personal point? I am running the marathon in four weeks’ time, and I was rather hoping the Chancellor might join me, but unfortunately his assets do not seem to be up to it.
The hon. Gentleman made an important comment just two months ago, saying to the Tamworth Chronicle:
“There are too many young people without employment and there are too many in longterm unemployment.”
I agree. Why will he not back our bank bonus tax to get young people back to work? That is what he should be doing. The Chancellor has failed on living standards growth and deficit reduction; he has also failed to deliver the balanced recovery that we need.
Mr Tobias Ellwood (Bournemouth East) (Con)
The right hon. Gentleman has just touched on banking. The Opposition constantly belittle our financial services industry. J. P. Morgan is an important bank, one of many in Bournemouth, with 5,000 employees who are not all millionaires. Every time Labour does that, all those companies think a little bit more about possibly leaving the UK and moving elsewhere, and that would be devastating for the economy.
Ed Balls
Jobs in our banking and financial services industry are very important indeed. We need to ensure that we have reforms that strengthen our banking industry rather than undermine it. Many hard-working people on ordinary salaries in our banks feel let down by the mistakes made in the banks and by the bonus culture. I have to say to the hon. Gentleman, though, that I have checked the figures in Bournemouth East. He opposes a tax on bank bonuses to get young people back to work, but in his constituency there has been a 1,000% rise in long-term youth unemployment since 2010. He is not willing to act.
Mr Ellwood
I am not sure where the right hon. Gentleman is getting those figures from. The figures released this week show that the number of people in employment has risen by 400 since a year ago. Employment is doing well in Bournemouth, as it is right across the country.
Ed Balls
Can the hon. Gentleman tell me how many people are long-term unemployed in his constituency? No? If I were him I would not try, because he would almost certainly get it wrong.
The Chancellor has failed on living standards, growth and the deficit, and he has also failed on balanced recovery. When the country is crying out for reforms to our banks to balance the recovery, back wealth creation and get an economy that works for all, not just a few, all that he seems to do is say that we can wait for the wealth to trickle down. Why are apprenticeship numbers for young people falling? Why is bank lending to small businesses still falling? Why are the Government planning to cut infrastructure investment next year?
Phil Wilson (Sedgefield) (Lab)
Is my right hon. Friend aware that today, Hitachi has announced that its global rail building capacity is moving to the UK? Is he aware that the factory where the trains will be built is in my constituency, and that it was a Labour Government who had the wherewithal to bring about the intercity express programme to ensure that Hitachi came to this country?
Ed Balls
The site for that new and welcome investment was designated under the last Labour Government as a result of my hon. Friend’s campaigning. We all want manufacturing investment to rise, but what worries me is that over the past two years, since the Chancellor’s “march of the makers” speech, manufacturing output has actually fallen by 1.3%. That is the reality.
As for house building, it is at its lowest level since the 1920s. We believe that the new Governor of the Bank of England is right to be worried that the recovery is not yet secure or balanced. That is why it is vital that the Chancellor does more to get more homes built for millions who aspire to get on to the housing ladder but find it hard at the moment. I have to say to him, we backed Help to Buy, but he should have reduced the limit from £600,000. There should not be a taxpayer guarantee for people buying homes for £500,000 or £600,000. We also need to do more to invest in affordable housing. That is the only way to avoid a lop-sided recovery, demand running ahead of supply and rising prices, putting pressure on the Governor of the Bank of England to slow the housing market through higher mortgage rates earlier than we need in the recovery. That would put business investment at risk and undermine the budgets of hard-working people across our country.
The Chancellor should have listened to the CBI, the International Monetary Fund and the Opposition and acted more boldly to boost investment in housing supply. He should have listened to Labour, and he should have listened to the Business Secretary, too. We have both warned of the danger of lop-sided and unbalanced growth. Like us, the Business Secretary was right to warn back in 2010 that the pace of deficit reduction risked choking off recovery. The Prime Minister was wrong last autumn to dismiss the Business Secretary as a Jeremiah when he warned about the unbalanced nature of the recovery by saying:
“We mustn’t now settle for a short-term spurt of growth, fuelled by an old-fashioned property boom…there are already amber lights flashing.”
I also remind the House of what the Business Secretary said about unbalanced growth just a few weeks ago:
“The shape of the recovery has not been all that we might have hoped for”.
He was right to make those warnings, but time after time over the past few years when he has publicly made such warnings about the risks, he has been ignored. The problem is, the Business Secretary is a member of the Cabinet that is doing the ignoring. How can he keep on ignoring himself again and again?
As for the top-rate tax cut, which I know a number of Government Members have criticised, I remind the Business Secretary that he said at the weekend:
“I don’t understand why people need a million quid a year.”
What we do not understand is why he has given people on a million quid a year a tax cut of £42,500 each and every year. He asks for sympathy—he told The Guardian a few weeks ago that
“since being in government I have become much more enslaved these days”.
I say “Free the Cable One”. Is it not the sad truth that he is not enslaved but in hock? He is not captive, he has capitulated. It is a Tory agenda, and he is part of it. He knows it, and he should get out of it before it is too late.
As for the Chancellor, he has certainly been busy in recent weeks, and not just preparing his Budget. The manifesto is being written, the team is being assembled, the campaign is under way. But the enemy is not called Ed, and it is not the general election that is preoccupying him. He has his eyes on a different prize. This is what his new best friend, the Education Secretary, said to The Mail on Sunday—[Interruption.] Government Members do not want to hear what he said, do they? [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think we do want to hear what the right hon. Gentleman has to say.
Ed Balls
They do not want to hear this, so before I remind people of what the Education Secretary said, let me tell the House what was said yesterday about the cost of living, the Budget, and all those matters, by the outgoing Conservative hon. Member for Thurrock (Jackie Doyle-Price): “The biggest impediment”—[Interruption.] I really think that hon. Members, especially those with small majorities, should listen to what she said.
Ed Balls
I have read it, and I think maybe you should too, my son—[Interruption.] I think they should listen. The hon. Member for Thurrock stated:
“The biggest impediment that this Party has when trying to secure a majority at the next election is that on one key question we constantly perform badly. That is on the issue of whether the Party is in touch with ordinary people.”
That was before the poster. She said that
“while people are worrying about whether they are keeping their jobs, whether they will be able to afford the electricity bill and how much it costs to fill the car these days,”
all the Tories seem to be doing is “talking about Boris.” She went on:
“We need to stop talking about ourselves and talk about the things that really matter to people. Otherwise we will be seen as out of touch, and Labour’s message will resonate.”
It certainly will, Mr Deputy Speaker.
In the light of the advice from the hon. Member for Thurrock about the cost of living, let me remind Members what the Education Secretary said over a wine-fuelled dinner with his old boss, Rupert Murdoch. He said that Boris Johnson “has no gravitas”, that the Home Secretary “has no friends”, and that only Osborne is “fit to lead.” Only Osborne is fit to lead? How did the Education Secretary explain his comments? He said he was “tipsy”. Tipsy? He must have been completely legless.
Penny Mordaunt
If press reports, which are what we are talking about, are to be believed, the right hon. Gentleman was critical of the Leader of the Opposition and his speech yesterday for not responding to a single measure in the Budget—there was nothing on support for manufacturing or reforms to pensions. The right hon. Gentleman is well into his speech, which is incredibly amusing, but does he realise that he is in danger of doing exactly the same thing?
Ed Balls
It was very interesting because we scoured the Chancellor’s speech and all the documents for one mention of the cost of living and living standards, and there were none at all—none! Conservative Members say that we are not talking about what is in the Budget, but they are not talking about what is undermining the living standards of people up and down our country.
Last year, the hon. Lady said:
“If we do not believe that the poorest are best served by our policies, we might as well give up and go and do something else.”—[Official Report, 20 March 2013; Vol. 560, c. 1023.]
I am afraid we are going to ensure that she has to give up and do something else.
It has been hard to understand what has been going on, but it is starting to make sense given all the Chancellor’s rebranding of recent weeks and months: the new less foppish hairstyle, the 5:2 diet, the new estuary accent, even photo opportunities down a coal mine—all part of his leadership business; the new working-class hero, not Gideon but George these days.
This weekend the Education Secretary took a further step in the Osborne rebranding. He said that it is “ridiculous”, and “preposterous” that Downing street is governed by a tight clutch of Etonians, and that that has got to change—we say “Hear, hear” to that, Mr Deputy Speaker. However, we all know what he was really trying to say through the pages of the Financial Times. He was saying, “Boris is a toff because he went to Eton, but George is a pleb because he only went to St Paul’s.” The Tory party is having a class war with itself. An Etonian elite has grabbed hold of the commanding heights of the economy, opposing the masses of Tories who went to lesser public schools. Old boys from Harrow and St Pauls, throw off your chains. What are they going to call themselves? The Bullingdon Bolsheviks? The Trust Fund Trots? Posh boys of the world unite?
In all seriousness, does the Chancellor really think that he can stand up for the interests of the energy companies, the hedge funds, Tory donors, deliver a massive tax cut to people earning more than £150,000, and then claim to be on the side of hard-working families—the party of the workers—just because he did not go to Eton? Posing as the posh boy proletarian will not wash when his own Budget ad campaign refers to working people as “them”, and when he will be remembered only as the Chancellor who cut taxes for millionaires while everyone else was worse off.
I know that many hon. Members wish to speak so I will conclude my remarks.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I do not think this clownish class warfare is fooling anybody, but does the right hon. Gentleman welcome the fact that 472 of his constituents will no longer pay income tax as a result of yesterday’s Budget?
Ed Balls
The problem is that they are all worse off because VAT went up to 20%. Is the hon. Lady worried that in her constituency there has been a 600% rise in long-term youth unemployment since 2010, which she is doing nothing about? As for the idea that class war will not wash, if I were the Chancellor I would try to find a different way to take on Boris, as I do not think this way will work.
There is a cost of living crisis, we do not have a balanced recovery, and all this complacent Chancellor does is play party politics in the Tory party. What a mess—a right old Eton mess! Surely we can do better than this. This was the Chancellor’s last chance, his final opportunity to tackle the cost of living crisis and make decisions that will directly affect people before next year, and he has blown it. Working people will be worse off in 2015 than they were in 2010, and the country now knows, especially after today’s patronising “them and us” advert for the Conservative party, that it will take a Labour Budget to put things right.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I have calculated that this is the 18th Budget to which I have responded in some capacity, and the fourth directly to the shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls). However, since he wrote many of the others, I was probably responding to him indirectly. Having heard the right hon. Gentleman over the years, I have picked up on some traits. First, he obviously has a capacity for a crunchy, memorable soundbite that often turns out to be wrong. I think he was the author of the phrase “No more boom and bust”, the consequences of which we are still living with. I also think he was the author of “triple-dip recession”, which of course we never had.
When we first had these exchanges a couple of years ago, the right hon. Gentleman had a very good football chant going on the Back Benches behind him: “Growth down, inflation up. Unemployment up.” Now of course we have growth up, unemployment down and inflation down. His current favourite is the “millionaires’ tax cut”, which I would find a little more persuasive had I not sat on on the Opposition Benches for 10 years being lectured by him and his boss that any increase in the top rate of tax above 40% would be counterproductive and damaging to the economy.
One feature of the right hon. Gentleman’s speeches that we all look forward to is the annual conjuring trick, and the 10 different ways we could use a bankers’ bonus tax. The rabbit out of the hat trick gets progressively more difficult because the rabbit gets bigger and the hat gets smaller as time passes, so I shall remind him of some of the figures.
When the right hon. Gentleman was City Minister and presiding over all of this, the total bankers’ bonus pool was something in the order of £11.3 billion, and it was £11.5 billion the following year when the Labour Government brought in a bankers’ bonus tax. According to the Centre for Economics and Business Research, which monitors these things, the bankers’ bonus pool was £1.6 billion last year. In the current year, it is estimated to be £1.3 billion. That is one-tenth of the size of the bonus pool on which the original tax was placed. We are then left with the question that is at the core of his fiscal policy: how is he going to get £3 billion in tax out of a £1.5 billion bonus pool? The charitable way to describe that is as a mathematical puzzle. We ought to refer it to the new Turing institute to investigate.
I should perhaps declare one self-interest. I do not have an interest in the millionaires’ tax, but compared with both the shadow Chancellor and the Chancellor I am more likely to take advantage of the relaxation in the annuity rules. It is worth recalling that over many years I came to this House on many Friday mornings, with Back Benchers from my own party and Conservative Opposition MPs, to try to achieve this reform. We were confronted with relentless stonewalling by the Labour Government of the day, of which the right hon. Gentleman was a part and in which he participated directly, with the very simple message that pensioners were far too stupid and irresponsible to be trusted with their own pension savings. This is one of the really big, major positive changes to come out of the Budget.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I hope the Secretary of State can explain to me and my constituents, who have seen their average gross weekly earnings decline by £160 since the general election, when adjusted for the consumer prices index, how they will be able to afford to exploit the new annuities rules on pension savings?
Vince Cable
The hon. Gentleman poses an issue that I am coming on to immediately, which is why we are a poorer country. There are people who have saved and have annuities, and there are many middle-income occupational pensioners who will take advantage of that. The central economic question raised is this: why are we a poorer country and how has that affected our living standards?
The question goes back to the financial crisis, which occurred when the right hon. Gentleman and his colleagues were in government. The Chancellor reminded us yesterday of the brutal fact that the British banking collapse and rescue was the biggest in the world. It was the biggest collapse in our history, going back not just decades but centuries, and it has done enormous harm. It has made the country poorer. The immediate after-effects of the collapse were to reduce output in this country by 7.5%, which is more than in the great depression. Not surprisingly, that has affected living standards in a radical way. It has impaired our capacity to recover from the damage inflicted on the banking system. It has required our country and the United States, but particularly here, under the right hon. Gentleman’s Government and the coalition Government, to resort to very unorthodox monetary policy. That has had a major impact on savings—which the Chancellor is now trying to remedy—asset prices and other factors. Opposition Members are surprised and indignant when they tell us that people are poorer than they were before the financial crisis. What are they comparing it with?
Sheila Gilmore (Edinburgh East) (Lab)
The Secretary of State seems to be avoiding the fact that people are poorer not since the financial crisis, but since 2010. Changes to tax credits, benefits uprating and so on have, for the lowest paid workers, more than outweighed any advantage gained from raising the tax threshold.
Vince Cable
The distributional analysis, which I am sure the hon. Lady has studied, suggests that the biggest impact of this shock has been on the highest 10%. That may be surprising, but that is what has happened.
Vince Cable
Let me just take apart particular aspects of the argument that has been put forward: how it relates to jobs, production and earnings. Let me start with jobs.
Vince Cable
I have taken an intervention.
Let me start with employment. What could well have happened, as a result of the financial crisis and its aftermath, was mass unemployment of the kind we had in the 1930s. We could very easily have got up to 20% unemployment, but we did not. We now have the lowest unemployment of any major country except Germany—lower than France and Sweden. This is partly a reflection of Government policy, but it is mainly a reflection of the common sense and flexibility of British workers, who accepted that in this crisis it was most important to be in work. We are now seeing the success of employment policy in the fact that we have had an enormous growth in employment, with 1.25 million net of public sector job losses and a gross increase of 1.75 million. Roughly five private sector jobs have been created for every one lost in the public sector. These are predominantly, in fact overwhelmingly, full-time jobs. The Opposition’s argument has been, “Well, okay, there are lots of jobs but they are part time,” but last year, in 2013, there were 460,000 new jobs, of which 430,000—95%—were full-time jobs.
Tom Blenkinsop
Since this Government came to power, the number of zero-hours contract jobs has trebled to more than 500,000. In 2012-13, some 3.48 million people had an average national insurance liability of £172 and were earning less than the lowest income tax threshold. That is an indicator of the type of work that people are having to take now, and they are still having to pay national insurance contributions on income below the income tax rate.
Vince Cable
We are well aware of some of the problems that arise with zero-hours contracts. That is why, as the hon. Gentleman knows, some months ago I commissioned a full consultation on dealing with abuses. What has come out of that consultation suggests that it is actually a very complex story. A lot of workers benefit from being on zero-hours contracts and want them to continue. Many do not and do encounter abuse. I am sure that before the end of this Parliament, Members will have an opportunity to vote on measures designed to deal with those abuses.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Secretary of State confirm what his colleague, the Chief Secretary to the Treasury, had difficulty in doing the other day: confirm that the employment rate is still below pre-recession levels?
Vince Cable
My understanding is that the employment rate, if the hon. Lady is talking about the total adult population in work, is now at its highest level ever—higher even than in the United States, which is famed for a flexible labour market.
I am surprised that Opposition Members feel that there are issues to pursue. [Interruption.] Somebody muttered “Immigration”. Last year, overwhelmingly the largest number—well over 90%—of jobs went to British workers. I do not know if they have studied those figures.
Mr Stewart Jackson
Does my right hon. Friend not think it disingenuous, given the Government’s inheritance of a 7% reduction in GDP presided over by the Labour party, for Opposition Members to categorise changes in personal allowances, which will affect 25 million people and take 3 million people out of tax altogether, as having nothing to do with the cost of living?
Vince Cable
Yes. I am delighted that the hon. Gentleman has raised that point, and I was going to dwell on it more later. It is a considerable achievement of this coalition that we have delivered, and indeed over-delivered, on the commitments I and my colleagues made before the previous general election. That helps people who are relatively low paid by lifting them out of tax, not just because they pay less tax but because it reduces the tax rate at the margin and provides a significant incentive to work.
Grahame M. Morris (Easington) (Lab)
Will the Secretary of State address the issue of youth unemployment? In my constituency, 825 under-24s are out of work and almost 200 of them have been out of work for almost a year.
Vince Cable
Yes, I will address the issue of youth unemployment and the hon. Gentleman is right to raise it. This is an issue that has, of course, been with us for many years, including under the previous Government when economic conditions were much more benign. Youth unemployment is currently at about 20%, but of course that includes many full-time students. The key trend is that youth unemployment is now declining rapidly. It is certainly less now than the level we inherited, and we have a whole set of policies designed to deal with it in a systematic way.
The shadow Chancellor put forward the idea of a youth guarantee. The problem that that presents is this: how can a job be guaranteed other than through the public sector? Of course guaranteeing a public sector job takes people off the dole, but it also creates a permanent need for subsidy and support. What we have done is create a route that allows people who are not going into full-time higher education to develop the preconditions for proper apprenticeships through traineeships, basic academic requirements and work experience, and then find their way into true apprenticeship training, which has been an enormous success: it has doubled since we came to office. The measures announced in the Budget statement yesterday will enable a further 100,000 people under 24 to be given apprenticeship training, and the quality improvements that we have made are driving up demand and supply at the same time. This is a much better way of dealing with young people who are out of work than creating artificial jobs.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Many Labour Members are very pleased about the improvement in the employment situation that has taken place over the last six months or so—indeed, over the last year or so. However, is not the big issue—apart from the caveats relating to short-time working and zero-hours contracts—the fact that the productive capacity of the economy seems to have shrunk, and productivity per worker has certainly shrunk? That is casting a very grave shadow over the length of the recovery that we might have expected. What are the Government planning to do about it?
Vince Cable
The hon. Gentleman’s analysis is spot on. Of course that is what has happened. We have managed to avoid mass unemployment, but the average productivity level has fallen. If we are to grow, and if living standards are to grow—that seems to be the focus of the debate—productivity must rise, which prompts the question of how we do it. We are currently doing it in an environment that is severely constrained. We must remember—and I think that the shadow Chancellor often forgets this—that one of the massive legacies of the crisis was the structural deficit. A deficit of that kind does not go away when growth increases; it is there, it is structural, and it will have to be dealt with. The structural deficit, defined as we defined it when we formed the coalition, has fallen from about 5.4% of GDP to 2.7%. We are nearly halfway, but we have to continue the job, and the next Government will have to continue the job. In that context, we must proceed with an agenda of raising productivity and growth.
Stephen Timms (East Ham) (Lab)
Does the Secretary of State acknowledge that a particularly serious problem is long-term unemployment among both young and older people, which, according to the figures released yesterday, has increased? Does not more need to be done to tackle that problem?
Vince Cable
It does, but the figures produced over the last year suggest that long-term unemployment is falling, along with unemployment in general.
Sir Edward Leigh
My right hon. Friend is making an excellent speech in favour of hard work. I read in the papers yesterday—so it cannot possibly be true—that the Chief Secretary had boasted that he had personally vetoed any indexing of relief for higher-rate taxpayers. Surely my right hon. Friend, who is pro-enterprise, cannot think it right that a police sergeant is paying higher-rate tax.
Vince Cable
I listened carefully to what was said, and I thought that there was an acknowledgement of the position of the people on the top-rate threshold. This is a modest increase, but there is a recognition that marginal rates of tax are beginning to bite on middle earners, and I think that that issue is now being addressed.
Mr Ellwood
My right hon. Friend has alluded to the important point that the figures for long-term youth unemployment—which was mentioned by the shadow Chancellor—include young people who are engaged in full-time study. Perhaps he will join me in congratulating Bournemouth, where Arts University Bournemouth, Bournemouth university and the Bournemouth and Poole college have doubled in size. Because of that, the figures suggest that long-term youth unemployment has indeed increased, which is not the case.
Vince Cable
I believe that about a third of the total number who are classified as “youth unemployed” are, in fact, engaged in full-time study. One of the big changes for which the coalition Government should take credit is the continued expansion in higher education: despite all the doomsday predictions from Opposition Members about the radical higher education reforms, the number of people going into higher education, particularly those from disadvantaged backgrounds, has risen.
Neil Carmichael (Stroud) (Con)
Does the Secretary of State agree that the issue of our productivity is linked directly to skills? Is it not rather ironic that the shadow Chancellor, who was Secretary of State for Children, Schools and Families, signally failed to help the nation to secure the right degree of skills—unlike us, with our long-term economic plan?
Vince Cable
Yes, indeed. I think that the apprenticeship model which we are now developing and expanding rapidly, in terms of both quality and quantity, is the remedy for the long-standing neglect to which my hon. Friend has rightly drawn attention.
Mr Robert Syms (Poole) (Con)
Is it not a fact that the British car industry will produce 1.6 million cars this year, and that Jaguar Land Rover alone will export 13.5 billion? Is it not also true that the Budget, with its help for manufacturing and exporters, is bound to help such industries and produce a good British success story?
Vince Cable
I had intended to say something about manufacturing incentives, but let me now emphasise a point that my hon. Friend has made very well. Some of our manufacturing industries, including the car industry, are expanding rapidly, and showing very high productivity and rapid export growth. The aerospace industry is another example. I was delighted to learn this morning that Hitachi, the leading Japanese company, is to establish the global headquarters of its railway manufacturing business in the United Kingdom on the basis of its existing investment in the north-east of England, and it is expanding and seeking business opportunities from the rail revolution that is taking place here. Manufacturing industries such as those, which were previously in decline, are now beginning to become resurgent in some key sectors.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Will the Secretary of State give way?
Vince Cable
That is not actually true. All recoveries tend to start with consumer spending, but lack of investment is a deep-rooted problem in the United Kingdom, and it is a problem with which we are trying to deal. However, if the hon. Gentleman studies the figures from the Office for Budget Responsibility, he will see that business investment increased by 7% last year, and the CBI projections for this year are higher than that. Business investment is beginning to take serious shape.
I think that, when we speak of growth, recovery and productivity, it is worth our while reflecting on some of the 18 Budget statements to which I have listened and responded in the past. For more than a decade, Budgets were introduced by the present Opposition, and there was a very positive story every year until we reached 2008. We had 2% growth, and there was enormous triumphalist cheering about the wonders of the brilliant Government economic policy that had produced that achievement. Comparisons were made with the past which suggested that this was the greatest economic performance, if not since the Victorians, probably since the Georgians, the Tudors or even the Romans. However, we had to go back to the Greeks to find the word that captured the spirit of those early Budgets. It was the word “hubris”, which encapsulated the Opposition’s simple inability to understand that weaknesses were building up during that growth.
Our Government are confident that we now have recovery. We are positive about it, and proud of our contribution to it. However, we acknowledge that there are some deep-seated historical weaknesses that now need to be addressed, and the Chancellor did address them in a systematic way in the Budget yesterday. The first and most important way of dealing with those weaknesses—and the driver of productivity—is, of course, higher levels of investment. That is why the extension of investment allowances, which will substantially increase the incentives for small and medium-sized companies, particularly those in the manufacturing sector—over time and in terms of scale—is such a big step forward, and is so welcome.
Gavin Shuker (Luton South) (Lab/Co-op)
The Business Secretary is clearly confident that he could have run the economy better than Labour during the 13 years during which it was in power, and I suspect that that enthusiasm and confidence have continued into the present Parliament. Perhaps the right hon. Gentleman could outline some of the ways in which the economy would be run differently if he, rather than the right hon. Member for Tatton (Mr Osborne), were Chancellor.
Vince Cable
I find that many of my ideas have been incorporated in Government policy, and I am very pleased about the progress that we are making in that respect.
Of course, increased investment depends on business confidence. Because we are approaching the election season, a danger is posed by some of the comments being made by the Opposition. Sir George Cox, who used to be at the Institute of Directors and is now an adviser to the Opposition, suggested recently that the business-averse policies of the shadow Chancellor and his leader were doing serious damage not to their own credibility, but to confidence in the country. I would underline that. If we have policies that appear to commit future Governments to energy price freezes that prevent new energy investment, we are undermining investment. Of course it is not just the Opposition; the people who want to take Britain out of the European Union and want to take Scotland out of Britain are also undermining investment confidence. Political certainty requires at least literate policies from the Opposition, which in the area of price freezes certainly is not the case.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I think the Secretary of State will know that that is not an accurate representation of what was said. May I ask him to comment on net lending particularly to small businesses, which is a concern? Why does he think that has continued to fall on his watch, and what is going to be done about it?
Vince Cable
Yes, there has been a continuing decline in net lending to small business. We think it is bottoming out, but it has happened and it is damaging. It is a consequence of the near-collapse of the banking system and the fact that some banks are now responding to much tougher regulation by being much more conservative in their lending. That is not true in all cases: Lloyds and Santander are increasing their net lending to small businesses, but many are not.
In response, the Government are establishing institutions, particularly the business bank, which are developing new flows and types of finance—internet-based lending, asset-based finance, invoice finance—in areas that hitherto were deficient, as well as supporting the establishment of new banks. About 20 new banks have been licensed over the last year, and that deals with the issue of bank competition that should have been dealt with when the last Government were in power and we had the Cruickshank report. That is now happening, however, and I therefore think we will begin to see the net lending trend becoming much more positive, but there is no underestimating the enormous damage that was done to the British economy as a result of the collapse of the banks, over which the last Government had responsibility for many years yet did absolutely nothing.
Vince Cable
The hon. Gentleman is right: compared with other institutions, RBS is particularly remiss in its lending policies, and that relates to the seriousness of its balance-sheet position and its failed attempt to become a big global bank. I meet the chief executive from time to time and I think he is trying to change the culture of the bank in a positive way, and move it in the direction of some of the other banks, such as Lloyds, which have already achieved that transformation.
The first priority has been to develop business investment and the Chancellor’s initiatives help with that. The second, and extremely important, priority, which has already been hinted at in interventions by Government Members, is in relation to manufacturing industry. It is important to take stock of the context here. We have had a catastrophic decline in manufacturing industry over a long period of time. Some of that is driven by technology and some of it is driven by international trade over which we have relatively little control, but certainly in the period after 1997 we saw the share of the British economy accounted for by manufacturing shrink from 20% to 10%, a decline that was even more rapid than in the mid-1980s, when policies were considered to be unfriendly to manufacturing. We lost 1.6 million jobs in that period.
Tom Blenkinsop
The Secretary of State will be aware that the work force at the Redcar steel plant in Teesside fell from 25,000 to 5,000 between 1987 and 1992, with several on-site plants being closed, but what is different now is the carbon price floor. Would the Secretary of State like to take credit for the Chancellor’s policy on that, which this Government brought in and which has led to the closure of Alcan in Northumberland and has put severe pressure on the steel industry in particular? In this context, will he bring the programme forward by two years so we do not have to wait another two years?
Vince Cable
The hon. Gentleman has anticipated the point I was about to make. One of the really positive announcements the Chancellor made yesterday recognises the difficulties facing the energy-intensive industries. I am aware that the Alcan smelter closed. I was there; I talked to the management about it and they acknowledged that although energy prices in the UK were one factor in their decision, it was by no means the only one. However, our energy-intensive industries are crucially important and it is not clever for them to close and migrate overseas, as we then simply get carbon leakage and do not do anything to improve the environment. It is therefore very important that they are protected from the increased costs that result from green taxation. The interventions the Chancellor made yesterday, which are very radical and meet the concerns of the industry, primarily centre on the renewables obligations and the feed-in tariffs and giving the industry effective compensation for those costs. I shall now be pursuing that with the European Commission, trying to ensure we get state aid clearance. The feedback we have had this morning from the engineering employers and other manufacturers suggests they are satisfied that the Government have taken a radical step that overwhelmingly meets their concerns.
Richard Graham (Gloucester) (Con)
The Secretary of State is making powerful points about the importance of supporting manufacturing. Under the last Government, the city of Gloucester lost 6,000 jobs. We have created 2,500 jobs since this Government came in, quadrupled the number of apprenticeships and seen manufacturing increase in a way that has not happened for about 30 years. Does the Secretary of State agree that the Opposition simply do not understand what manufacturing needs, and that the doubling of the capital allowance is a huge step forward?
Vince Cable
That is right, and the industrial strategy we are following across government gives particular priority to the aerospace industry, and I know my hon. Friend’s part of the country has benefited considerably from the development of the aerospace supply chain.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Secretary of State touched on the compensation scheme announced yesterday. For the sake of clarity, will he inform the House how much of the compensation scheme announced in November 2011 and which was due to come in in April 2013 has so far been paid to energy-intensive industries?
Vince Cable
The element that relates to the European emissions trading scheme has already been paid. The companies have already received the cheque. The sums are not large because the ETS scheme proved to be pretty ineffective, but none the less the compensation is being paid and it is now being extended to a wider range of costs. [Interruption.] The hon. Gentleman seems to be indignant, but I think he should talk to his local manufacturers who have expressed full satisfaction with what we are doing.
Chris Kelly (Dudley South) (Con)
The Secretary of State is talking about energy-intensive industry and there is still a great deal of that in my constituency. Does he agree we do not want these industries going offshore where environmental legislation may not be as stringently enforced as it is in the UK? We need to keep those industries here in the UK, and yesterday’s Budget helps us to achieve that. [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before the Secretary of State answers the intervention, I should say that there are far too many conversations on the Back Benches. The House is getting restless. If the House does not calm down and let the Secretary of State get on with it, he will never come to the end of his speech.
Vince Cable
I am trying very hard, Madam Deputy Speaker, to take as many interventions as Members wish to throw at me.
In relation to Dudley and manufacturing, my hon. Friend is right that it is not sensible to lose manufacturing overseas as we will get carbon leakage and lose the production and the jobs. It is very much in our interests to stop that happening and we are doing so. There is a lot of evidence of the reshoring of production, including to the industries in the west midlands to which my hon. Friend refers.
The priority the Chancellor has given to manufacturing, to investment and the savings that lie behind investment, and to exports through the expansion of export credit are absolutely appropriate to getting long-term growth and the productivity that that entails. There is a lot more to be done. We still have serious constraints in terms of skilled labour. There are still problems in opening up business finance. We have to invest much more in science and innovation, although we are doing that. However, the themes that run through yesterday’s Budget of support for investment, for savings and for exports are absolutely right and they will take this country to the right place.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It will be obvious to the House that a great many Members wish to speak and there is very limited time available. I must therefore impose a formal time-limit of five minutes per speech. I appreciate that if Members take interventions—which of course is necessary in a lively debate—that five minutes is likely to grow to seven minutes, but if Members wish to be courteous to fellow Members, as I hope they will, they will remain within the five minute limit.
Stephen Timms (East Ham) (Lab)
At the start of his speech yesterday the Chancellor drew attention, naturally enough, to the fall in unemployment announced yesterday morning. That is unequivocally good news, but it has been a very long time coming. We were told after the general election that the new Government’s policies would lead to steady growth and falling unemployment. In fact, for three years there was hardly any growth, unemployment remained high, and only now are we finally starting to see unemployment coming down.
That three-year delay has meant that the promise to eliminate the deficit within this Parliament will not be delivered either, and an important part of the legacy of that three-year failure will be in the labour market. Because the economy did not grow for three years, a large number of people are now long-term unemployed, and those long-term unemployed will not be the ones who move into the new jobs finally now being created. The long-term unemployed face much higher barriers to getting into work than others.
A striking detail in the labour market statistics yesterday, which I mentioned in my intervention on the Secretary of State, is that the number of people out of work long term—more than two years—went up. In his response a moment ago, the Secretary of State said that overall, long-term unemployment is coming down. In fact, it went up yesterday to exactly the same figure as a year ago, namely 450,000. That is the central challenge for labour market policy in the next few years: how do we bring people who have been out of work for a long time, and who have the biggest barriers to contend with, into productive employment?
Lyn Brown (West Ham) (Lab)
We have noticed the thirst for work in the job fairs that we hold collectively in our constituencies. Does my right hon. Friend agree that the Government are simply not meeting that thirst for work?
Stephen Timms
My hon. Friend is absolutely right. There is huge enthusiasm for getting back into work in our area and across the country. It is absolutely clear that the answer to long-term unemployment is not the Work programme. The Chancellor rightly identified in his spending review statement last summer that it falls into the category of “underperforming programmes” in the Department for Work and Pensions. Figures today show that the Work programme’s performance has got worse.
I want to talk about the compulsory jobs guarantee, which my right hon. Friend the Member for Morley and Outwood (Ed Balls) has referred to and which he and the leader of our party set out at the beginning of last week. The proposition is for every young person who has been out of work for more than a year, and every older unemployed person who has been out of work for more than two years, to be guaranteed the offer of a choice of jobs. In some cases, a training place will be one of those offers. The jobs will consist of at least 25 hours a week for at least six months, and will pay at least the national minimum wage. The way in which we will deliver the guarantee, as in the future jobs fund before the election, is that the Government will pay the wages.
A fortnight ago, the shadow Secretary of State for Work and Pensions and I visited a software company in Cardiff, which employs 150 people. The company is growing fast and things are going well. It recruited 12 young people under the jobs growth Wales programme, which works on the basis that I have described. The Secretary of State commented in the House a few weeks ago on the fact that labour market performance was better in Wales compared with the rest of the UK. He is right, and jobs growth Wales is an important part of the reason for that. The company that my hon. Friend and I visited told us that it would never have been able to take the risk of taking on those 12 young people had it not been for the support of jobs growth Wales. That is why the Federation of Small Businesses in Wales is a champion of the programme. The subsidy for those 12 young people is long since finished, and they have been in their jobs for a year or so. Of the 12 young people who were taken on, 11 are now in permanent jobs with that company. The twelfth was not kept on by that company but has a job in a different company not far away. That is the kind of success that we can deliver with the approach that we are describing. We want to see the job guarantee delivering right across the country.
What a contrast that is to the wage subsidies under the Government’s youth contract, which has been a complete damp squib. We are about 60% of the way through the three-year programme, and only 7% of the budget has been taken up. More than 900,000 young people—nearly 20% of young people—are still out of work. We must do a great deal better than that.
On Wednesday evening, at the invitation of Colin Crooks, the social entrepreneur in residence at the London borough of Lambeth, I attended a reception at Brixton East for a couple of dozen start-up enterprises in Lambeth that were being mentored, with support provided by the Department for Business, Innovation and Skills, by Tree Shepherd, the organisation that Colin leads. It was a great evening with a tremendous buzz as imaginative and creative people presented their products, food, crafts and fashion. There are now opportunities for people to take the risk of starting up new enterprises. The Government must get behind them and support them particularly at the key moment when they take on their first employee. That is one of the key things that our guarantee will do, and I urge the Secretary of State to support it.
Mr Douglas Carswell (Clacton) (Con)
It made a pleasant change to listen to a Budget that had not been pre-announced in the previous day’s newspapers. That is as it should be, and it is a welcome change from what went on in the past, when details were leaked and briefed beforehand.
Parts of the Budget are absolutely magnificent, and I am particularly pleased about the decision to raise the income tax threshold. Many of my constituents are on relatively low incomes. Before 2010, people paid income tax after the first £6,500 of income, but now they will pay it only after the first £10,500. It is absolutely right that people be allowed to keep more of the money that they earn. It is absolutely fair to have this tax break—it is a tax break for everyone—and it does the right thing by incentivising work. It helps to end the crazy situation that has been engineered whereby the state takes tax from families with one hand and gives handouts with the other—a bizarre situation that got vastly worse between the years 2001 and 2010.
Alex Cunningham (Stockton North) (Lab)
The hon. Gentleman talks about the £10,500 limit, but will he spare a thought for the thousands of workers on Teesside, and millions more across the country, who do not earn anywhere near £10,500? They are seeing a rise in the cost of living, energy bills and everything else, and they are not benefiting at all from the Budget. Has he got something to say to them?
Mr Carswell
I would love to cut tax right across the board on a whole range of things, which would help people in that situation. The reduction in income tax for people on relatively low incomes will undoubtedly be welcomed.
I am also thrilled and delighted—it warmed the cockles of my free-market heart—to hear about tax breaks for savers. With interest rates having been so low for so long, it has been a pretty torrid time for savers. The raising of the personal tax-free savings allowance is fantastic news. So, too, is the removal of the artificial distinction between different types of ISAs. The more we can encourage people to save, the better. One person’s deferred consumption and saving is somebody else’s loan or credit.
I cheered, too, when I heard about giving folk flexibility as to how they use their pension pot. The implications of that are potentially profound and radical. It could mean that pension pots no longer die with people. It could mean that they become a vehicle for passing wealth down the generations. The implications are potentially huge and welcome.
Neil Parish (Tiverton and Honiton) (Con)
My hon. Friend is making a powerful speech. I agree with him that it is absolutely right to allow people to have their own pensions and spend their own money. Will the changes not also deliver better annuities for those who want to buy them, by introducing more competition into the financial services sector?
Mr Carswell
My hon. Friend is absolutely right. The need to buy an annuity was something that troubled a lot of my constituents, and I am pleased about this change. The fact that the Government are no longer going to presume, rather paternalistically, that they know best how folk should manage their pension pots will have big implications, and we need to reflect on them. The change will have big implications, not least for the people who will now be taking steps to plan for their own financial security.
I was encouraged to hear the Chancellor talking about energy costs. He was absolutely right to say that the low energy revolution was helping to re-industrialise the United States, and that that could happen here too. However, rather than simply reining in the worst excesses of the carbon price fixing scheme and other corporatist market-rigging systems, I would like us to abolish some of those schemes entirely.
I was slightly less enthusiastic about one or two aspects of the Budget, and I shall talk about those now—albeit briefly, those on my Front Bench will be delighted to hear. First, I am concerned that the Budget is fiscally neutral. We have relied for the past few years on cutting the deficit by increasing spending in cash terms and hoping that tax receipts will rise faster. I do not think that that is the best way to do it. We need to take a slightly more robust approach. As a result of the approach that we have taken, the deficit has fallen from 11% in 2010 to approximately 5%, which is good, but we said in 2010 that we would close the gap within four or five years. We are still saying that today. It means that we are still borrowing more than £100 billion a year—money that we do not have. That will have enormous consequences when this cheap money merry-go-round comes to an end and interest rates rise.
I am also baffled that the Opposition are unable to ask the obvious questions about this. Perhaps that is because they have no coherent alternative, or because their policy is simply to borrow more. However, as someone who occasionally opposes his Government on certain things, I find it extraordinary that the party whose job it is to ask the awkward questions seems to be unable even to understand the questions.
I am delighted that the Government are taking action to encourage exports, but I am not absolutely convinced that giving cheap credit to exporters is the only way to do it. I wonder whether this country’s relatively poor export and productivity performance over the past decade is partly a consequence of malinvestment, and whether that in itself is a consequence of cheap credit. Perhaps we need to flush out malinvestment and remove what is, in effect, the cholesterol in our economic arteries. Cheap credit can boost exports, just as it can boost the housing market in the short term, but I wonder whether it can have those effects in the longer term.
I shall spend the minute I have left making a wider point about economic output. It will soon exceed the pre-crash peak, which is wonderful news. The revision of output to 2.7% is impressive, but I ask the House to bear two things in mind. I say this in a spirit of non-partisanship. First, we are seeing a massive fiscal stimulus in this country, even though we do not call it that. We do not call it a massive Keynesian fiscal stimulus; we all prefer to pretend that it is not happening. By definition, however, if we spend £100 billion more each year than we take in tax, that is a Keynesian fiscal stimulus, and it is happening on a vast scale.
At the same time, we are having a massive monetary stimulus, with record low interest rates, cheap credit and quantitative easing. Without question, fiscal and monetary stimulus will raise output. I want to ask whether that is sustainable. I am genuinely baffled—I say this frankly and honestly—as to why the Opposition are unable even to ask these questions. Overall, I think this is a good Budget and it is to be welcomed, but I am genuinely surprised by the response of the party opposite.
Ms Karen Buck (Westminster North) (Lab)
This is a budget that does little or, in many cases, nothing for the millions in the lowest income groups in this country. Unsurprisingly, the chief executive of the Joseph Rowntree Foundation has said:
“This is a Budget for the people who already have, not the people who need to benefit most from the return to growth.”
It is a lost opportunity to help the 13 million people on low incomes, who are unlikely to see any benefit from these measures. That assessment fits in with the analysis of the Institute for Fiscal Studies, which shows that more than 300,000 children will be pushed back into absolute poverty over the course of this Government and that, on present trends, 900,000 children will be returned to relative poverty by 2020. That will undo everything that the last Labour Government did to tackle poverty. The Budget sets a cap on overall social security spending while doing little or nothing to tackle the drivers of rising social security spending, especially among working people who are being squeezed by rising housing costs.
I want to talk about two policy areas that lie behind these failures. As we have heard, households have suffered the longest period of falling living standards and squeezed wages since the 1850s. We have had 50 consecutive months of a wage squeeze below inflation. I came into politics because I was driven by concerns about unemployment, and the growth in job numbers is undoubtedly good news, but it would be completely wrong to see the growth that has been achieved in recent months as an unalloyed success story. Among other things, one third of a million families are now working fewer hours than they want, with more people being forced into part-time employment. The latest job figures show 211,000 people entering self-employment, which represents a large proportion of the recent jobs growth. Self-employment is undoubtedly a good thing for many people, but one problem is that it is strongly associated with low pay. Low pay is part of the crisis that is underpinning the fall in living standards.
Alex Cunningham
My hon. Friend has quoted one organisation; let me quote another. Gillian Guy of Citizens Advice has said:
“The chancellor talked about making, doing and saving. This budget needs to work for those who are making do and can’t save”.
Are those the people that my hon. Friend is talking about?
Ms Buck
I am talking about the 13 million people on very low incomes, many of whom have incomes that are so low that they will not benefit from the change in the income tax threshold, welcome though that is. It will do nothing for the people whose earnings are already below it.
There are 5 million workers on low pay in the UK—one in five of the work force. That is one of the highest proportions in the developed world. The academic consensus shows clearly that the minimum wage, although fiercely and wrongly opposed by the Conservatives, boosted earnings without causing unemployment. It has all but abolished extreme low pay, but in recent years there has been an increasing spike in the number of workers on the minimum wage. The proportion of workers on the minimum wage has grown by nearly 60% in the past five years. Rather than being part of a continuous process of uprating the pay of those on low incomes, it is now becoming the going rate in many sectors. That is one of the causes of falling living standards for millions of people and of increased social security spending.
This is a particular challenge for London. Londoners did not benefit as much from the introduction of the national minimum wage as did people in many other parts of the country, because of the slightly higher wages. The trend towards more workers earning at or just above the level of the minimum wage has exacerbated the crisis in living standards in London.
As well as low pay, another challenge—and another driver of social security spending—is housing costs. It was interesting to see that yesterday’s report from the Office for Budget Responsibility stated:
“The largest driver of the rise in spending on housing benefit has been caseload growth in the private rented sector…The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth…almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”
The relationship between low pay—and a failure to uprate pay over a number of years—and rising housing costs is driving more and more people, particularly working people, into dependency on housing benefit.
None of us wants to see expenditure on keeping people unemployed or lining the pockets of private landlords by subsidising higher rents. We all want to see a fall in social security spending on these things, but while pay is low, while average living standards are not rising and while rents are rising, we are going to see more costs and expenditure in that area. But there is a solution. The Chancellor promised a rise in the national minimum wage to £7, but we saw a 17p increase. Many employers across the country could pay more than the national minimum wage and they should be encouraged to do so.
We will not see a cut in social security spending unless and until we reverse the calamitous fall in the building of social housing, which is the only safe and secure means of ensuring that low-income people have low housing costs. Combine those two things and we will see a major shift away from the social security spending, which we would like to see fall, into a rise in living standards for millions of people. This Budget has not been able to provide that.
Chloe Smith (Norwich North) (Con)
I hope that the House will excuse my slightly husky voice and cough, which I hope to get past in making my comments.
I welcome this Budget. The Chancellor is right to be focused on getting Britain to
“out-compete, out-smart and out-do the rest of the world.”—[Official Report, 19 March 2014; Vol. 577, c. 789.]
I, too, want the best for Britain and for Norwich in that sense. That kind of ambition is the only way to get economic security, and the single biggest risk to it would be to abandon the plan and listen to Labour’s calls to borrow more, spend more and put up taxes. That would, of course, land hardest of all on the next generation, who would only have to pay back those debts that Labour wants to dodge. This Budget is great news for businesses in Norwich. Those who are looking to invest and export will welcome measures to cut energy bills, to double the tax allowance for investing and to boost support for exporters. I know from my work in leading a project called Norwich for Jobs that businesses do want to invest and to grow. I hope this Budget will help them to do that and make the Norwich economy more resilient. I hope that that translates into more jobs locally, because that is one thing that economic security is all about. I also welcome the previously announced measure, coming into effect next month, of the employment allowance, which will particularly help small businesses.
I welcome the increase in the personal allowance, because it leaves more of people’s money in their pocket as they go out to work. It is worth up to £800 for more than 80,000 people in Norwich. I am a Conservative for that very reason: I believe that people are individual, responsible and free to spend their own money in line with their best decisions. I also support the Help to Buy scheme and running that for longer until 2020 could mean that many more families in Norwich get on the housing ladder. I strongly support the tax-free child care scheme that has been announced. Importantly, that scheme will particularly help basic rate taxpayers, who often find that the cost of child care outweighs the financial benefits of both parents working. It is important to give families greater stability and the flexibility to make their own choices. The Budget is also good news for pensioners, providing the flexibility and reward that has been discussed in this Chamber earlier today, and for the 24 million people who hold individual savings accounts.
Let me make two further constituency points before addressing a slightly more meaty topic. It is particularly good news for my constituency that the Chancellor is going to slash the tax on bingo by half. Mecca Bingo and all its employees and customers on Aylsham road in Norwich were celebrating that overnight. I also welcome the removal of VAT on fuel for air ambulances, as the East Anglian air ambulance has its headquarters in my constituency.
I wish to add my support for the nearly 12,000 workers in my constituency who are struggling in work on rates a little above the national minimum wage. The Chancellor has been right to call for a higher minimum wage, and I support that. This Budget statement has shown that the economy is recovering; jobs are up—1.3 million more people are in work now than there were in 2010. People are also looking to have more money in their pocket. On that point, I have dealt with the personal allowance. I mentioned my work on Norwich for Jobs, which helps to get young people into jobs and apprenticeships, and that helps more families get security, too. The project has helped nearly 600 18 to 24-year-olds in work over a year. We set ourselves the goal of halving Norwich’s youth unemployment in two years. We can see the effects directly in the employment figures, and I am sad only that the shadow Chancellor is not here to hear this. We set out to halve Norwich’s youth unemployment from 2,000 to 1,000. It has come down by 670 since we began the project, and every one of those figures is a young person taking home a pay packet and gaining experience. That is thanks to the local firms that have pledged to help them.
I give that example to show that firms want to employ great people, but it is also in the interests of a business to retain them, and paying the living wage can help to do that. As hon. Members will know, the living wage campaign asks for a voluntary commitment from employing organisations. Some would like Norwich to declare itself a living wage city. Norwich has demonstrated, through the firms that are pledged to Norwich for Jobs, that it is a city that cares. It is a city with a sense of pride. It will achieve things for its young people and for its strong industry.
Whether those same firms are all in the position of being able to pay more, as the living wage campaign asks, is for them to decide in respect of whether they can retain those jobs. Small firms are wary of being placed in an impossible competitive situation against larger firms that can absorb costs. The Federation of Small Businesses reports that more than two thirds of staff in an average small business are paid at or above the living wage already, but it believes that that should remain a voluntary decision for employers, and I support that view. My hon. Friend the Member for Hexham (Guy Opperman), a keen supporter of the living wage, has noted that there is a “lack of detailed analysis” behind it. The argument for the blanket rise does need more explanation. In broad terms, I support the campaign—I only wish I had more time to discuss it.
Mr Geoffrey Robinson (Coventry North West) (Lab)
It is a pleasure to follow the hon. Member for Norwich North (Chloe Smith) and my hon. Friend the Member for Westminster North (Ms Buck), both of whom spoke about the minimum wage and those on low wages. What the hon. Member for Norwich North forgot to say is that this Budget does absolutely nothing for the millions who are paying no tax at all, and that is our principal criticism of it.
Before I deal with that, may I just say a few words about the speech by the Secretary of State for Business, Innovation and Skills, who reminded us that he has seen 18 Budgets? I have seen nearly all of them with him and I remember many of his trenchant criticisms in the past, particularly in the first decade of this century. He seems, as the Tory party wishes to do, to have airbrushed out of his history—and certainly out of his memory—exactly what this Government’s so-called economic plan has achieved over the past four years. It is no good saying that the plan worked, because the plan did not work on any of the measures it set out to measure itself by.
Let us discuss these things one by one: we have had three and a half years of flatlining; we have had growth which has achieved less than 50% of the Government’s plan; we have had investment that is below 50% of what they set out to achieve; and on exports—exports investment was at the heart of the plan—they have achieved less than 50% of the plan, as Members well know. That is some plan, given what has happened on all the key indices.
Mr Robin Walker (Worcester) (Con)
Will the hon. Gentleman address the issue of 1.3 million private sector jobs created?
Mr Robinson
I will come to that in a moment, although the hon. Gentleman may have been here when I intervened on the Secretary of State on that precise point.
Let us examine the borrowing record, as borrowing should have been central to all this. Because we have been able to have more investment and more exports—capital investment and exports—we should have growth, which would reduce the borrowing. In fact, over the four-year period, with us now entering the five-year period, we are going to borrow nearly £200 billion—the figure is £190 billion—more than we projected. We were to reduce borrowing as a percentage of GDP, but even in the next two years—years 5 and 6—it is projected to go up as a percentage of GDP. As for balancing the budget, that has been pushed out by a further two years. This is not a plan that has succeeded; it is a plan that has failed in almost every respect.
There is one exception—the hon. Gentleman referred to it and I also challenged the Secretary of State precisely on it during his speech: the employment record, particularly in the private sector, is remarkably and surprisingly good. I do not want to get into how many jobs are part-time, zero-hours contracts and so on. The fact is that the labour market has shown itself to be much more retentive of labour and productive of labour than we expected. For anybody in this House or in the Government, or on any of the other projections indicated from any sector, the performance is quite encouraging, except in one crucial respect: it suggests that, given where output is relative to employment, we have suffered a dramatic loss—probably for the long term, for all we know—in the productive capacity of the economy and in the productivity of our labour force. Unless that can somehow be rebuilt—there is nothing at all in the Budget to address that point—we are in for a much longer and slower recovery than we could have achieved. That is a big disappointment. The Secretary of State analysed it willingly, but the Office for Budget Responsibility itself says, “There’s nothing here that’s going to make any difference to the forecast we made a year or so ago.”
In other words, we have done nothing and are proposing to do nothing, to address the central issue of the productive capacity of the economy, which would underpin, sustain and increase our recovery rather than hold it back. There is nothing in the Budget that will improve that. Of course there are a couple of measures that we welcome, including the increase in capital allowances. I never understood why they were cut in the first year. We viciously opposed it at the time. We also approve of the improvement in export financing. However, there again, the Chancellor and the Government have form on those issues. They introduced two similar export financing schemes, one of which was strangled at birth and the other helped just five firms. I hope the Government are serious this time. We do not want to see imaginative and quite substantial measures being choked off by the bureaucrats.
Neil Parish
The hon. Gentleman has been making many predictions. The shadow Chancellor said that our policies would mean 1 million fewer jobs, and yet we have created 1 million more jobs. Will he comment on that 2 million credibility gap?
Mr Robinson
We are very pleased to see employment increasing. What the hon. Gentleman needs to understand is that there is a problem of productive capacity in the economy, and we have done nothing to address it. Labour was challenged to spell out its criticisms of the Budget. The central point is that we are opposing the Government by saying what they have not done. We are in a cost of living crisis—probably the worst that any of us will witness in our lifetimes—and yet the Government have done nothing to alleviate the position of the worst off in this country. That is our principal criticism of this Budget. The Government show no indication of wanting to address that matter, which is why we will oppose the motion when it comes to a vote. It is a pity because there is an opportunity for the Government now, with a relatively stable economy—our outlook is better now than before—to show that they can get their priorities right. It should not be just those on £150,000 a year or more who benefit, or those who can save £15,000 a year—some families have to live on £15,000 a year, let alone save it. The priorities are wrong. We welcome and support the boost to the manufacturing sector, and hope that it will be carried through.
Mr David Heath (Somerton and Frome) (LD)
In contrast to the economic amblyopia of the hon. Member for Coventry North West (Mr Robinson), I honestly believe that there are many things to welcome in this Budget. Chief among them is the greatly improved economic situation in which this country now finds itself. I must say that I had my doubts that we would achieve our employment objectives, but we have, and in full measure. Unemployment in my constituency is now at 1.6%, compared with 17% in the mid-1980s. That shows just how far we have gone. I am also enormously encouraged by the 1.5 million new apprenticeships that have been put in place by this Government, because that seems to be at the core of our economic recovery.
There is a strange process in this House by which the Budget is separated from the autumn statement, which is not entirely logical. I find it difficult to talk about the money-raising capacity of the Government without mentioning where that money will be spent. May I give due notice that when we come to the autumn statement, I will expect to see clear commitments to flood alleviation schemes, such as the sluice on the River Parrett, and the long-term changes for sustainable maintenance of our flood systems. I will expect to see the A303 explicitly mentioned as part of the capital programme. I will also expect to see the long-promised improvements in our rail infrastructure in the west country, including the opening of Somerton and Langport stations, which will offer long-term economic benefits to our area.
Let me deal with what is in Budget. I wholeheartedly welcome the increase in the tax threshold, which is a commitment that I made before the election. Not only does that take millions of people out of tax altogether, but it represents, by 2015, an £800 tax cut for people on modest incomes in my constituency and across the country. That is enormously important. From a parochial point of view, I would have welcomed the freeze in cider tax, except that I felt it was slightly undermined by the cut in beer duty, and I felt that perhaps cider drinkers did not have parity with beer drinkers. None the less, the freeze is welcome.
I welcome the changes announced by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). We have campaigned for many years for this straitjacket of the annuity-buying system to be released.
I welcome the industrial strategy that the Business Secretary has developed over recent years. I am talking about the encouragement to invest and the support for exports. One sector in which I have had direct involvement is the food and drink sector. That is the biggest manufacturing industry in this country, with a £90 billion turnover and 400,000 workers engaged in it. Exports form a key part of the sector, providing £9.3 billion, which is a 5% increase year on year. None the less, we still have far more to do. There are still many opportunities that need to be realised. The fact that 90% of small and medium-sized enterprises that produce food and drink still do not export suggests that we need to do an awful lot more in the way of encouragement.
Paul Burstow (Sutton and Cheam) (LD)
My hon. Friend is absolutely right that investment and exporting are key to our growth. Does he therefore welcome the other announcement that was made yesterday, which is the doubling of the tax allowance when it comes to capital investment, from £250,000 to £500,000?
Mr Heath
Absolutely. We are getting an industrial strategy that makes sense for this country. The point was made that we need to offer direct encouragement to firms to export, but what is lacking is aspiration. What we need to do is increase the level of aspiration of many of our smaller firms.
There has been mention of the national minimum wage and the difficulties caused by not uprating it. May I remind the House that there are still abusive employers who do not even pay the national minimum wage and who are not investigated and prosecuted? There are also many abusive contractual relationships, especially in some sectors. That is not to damn every employer in those sectors; a lot of them are very good and conscientious employers. However, it worries me that in the catering and entertainment, care and construction sectors there are still bad employers who need to be brought to book. We already have a model to deal with them. It has been shown to be successful and I used to use it when I worked with the Gangmasters Licensing Authority. I do not believe that the GLA can simply expand into other sectors; that would be beyond its capacity. It also runs the risk of breaking an organisation that is doing a very good job in its sector. We need to replicate that in the other sectors because, for me, avoiding abusive relationships between employers and employees is one of the key issues that remains. Some of the virtually indentured labour that goes on is linked to our work on modern-day slavery. I believe that the Government can and should take action to end it once and for all.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
First, I want to discuss the effects of the Budget on the steel industry. I welcome the news that the Government have announced their intention to introduce relief against the rapidly rising costs of carbon levies, and the mitigation of the renewables obligation is a particularly good step forward. As chair of the all-party group on steel and metal related industry, I, along with colleagues from the group, trade unions and the steel industry, have been campaigning hard on that for a long time. Having said that, however, I do have some concerns. The compensation is still two financial years away and the steel industry will continue to face considerable challenges in the interim given that the international demand for steel is still at mid-financial crisis levels and is probably worsening. Will the Minister clarify whether state aid clearance will take those two years and is there any way that the Treasury can bring the compensation forward so that the steel sector and other foundation industries do not have to wait?
I remind the House that the carbon price floor, which hits UK manufacturing four times as hard as our EU competitors, was introduced by this Chancellor and this Government. That has led to a number of jobs being lost, particularly at the Tata Steel site in Newport where 200 jobs were highlighted for potential redundancy last week. We have also seen the loss of Alcan in Northumberland as well as other manufacturing sites in the foundation sector.
I am similarly cautious about the Government’s proposals to increase the personal allowance. Although on the face of it that is an attractive policy, I am wary as increasing the personal allowance for income tax will do nothing for the millions of low earners who earn less than the current personal allowance.
It has recently been reported in the press that the Chancellor is considering renaming national insurance in the run-up to a potential merger with income tax, so I am surprised that the Budget does nothing to address the anomaly faced by millions of people who earn less than the annualised primary threshold and still face a class 1 national insurance contribution liability. For example, despite earning less than the annualised primary threshold in 2012-13 some 3.48 million people had an average national insurance liability of £172 simply because of the distribution of their earnings across the year. The anomaly is caused by the fact that national insurance liability is calculated per pay period rather than annually. That is particularly problematic for the 583,000 people working on zero-hours contracts—a figure that has trebled since the general election—whose pay varies significantly week to week. I urge Ministers to revisit this subject in addition to considering raising the personal allowance, as it would be a positive step to take those very low earners out of an unpopular and regressive tax. I also want to see an update from the Chancellor on his 2011 proposal to merge national insurance and income tax.
I also have some concerns about the Government’s proposed changes to ISAs and the proposed introduction of a pensioners savings bond. I have tabled a number of written questions on these issues, but I hope that Ministers will be able to address them today. As many hon. Members have stated, increasing the ISA limit does little to help those who could not dream of saving £15,000 a year. I think that is a legitimate concern, but I am also somewhat concerned by the removal of the distinction between a cash ISA and a stocks and shares ISA. My fear is that it might nudge savers to move investments from stocks and shares ISAs, the contents of which often include the more speculative investments necessary to allow for innovation and growth, to low-yield cash ISAs. Although savers have differing personal risk appetites, it would be interesting to see what assessment the Treasury has made of the effects of ISA simplification on capital markets.
I am also concerned about the pensioners savings bond. Although of course we all want pensioners to get the best possible deal, I am curious about how, at a time of austerity and cuts, the Treasury can fiscally justify paying 4% annual interest on a three-year bond for pensioners when a three-year gilt yield is less than 1.2%. I am also curious about how the Chancellor feels that it is justifiable to offer the product only to those who are over 65 and not to younger hard-working families who might want access to such a market-beating preferential interest rate or who, for reasons such as early-retirement caused by workplace injury or other anomalies, might financially depend on income from savings. I have tabled questions to ask how the Government will account for that and whether they will consider the 4% annual interest they will pay on the debt under the debt interest headings they use in their analyses. Furthermore, has the Treasury considered whether it will crowd investment out of the private sector by offering such an interest rate when banks and building societies are offering, at best, a 2.7% fixed annual interest rate on three-year bonds? In previous Budgets from this Government, we have heard arguments about the public sector crowding out the private sector. I would like to see a Treasury assessment of how the policy might crowd out the private sector.
Chris Kelly (Dudley South) (Con)
I welcome the Budget statement. It is a Budget that will help us build a resilient economy and it is part of the Government’s long-term economic plan to put this country back on the path to sustained growth, a path that was deviated from by the Labour party with the debt-fuelled politics of the final decade of its time in office.
I commend my right hon. Friend the Chancellor who, since coming to office, has been proved right on all the big calls of the past four years. He correctly identified the problems and was right to set out a clear plan to address and then overcome them and equally right continually to stress that there was no alternative to plan A if Britain were to turn the corner. The deficit is down by a third, and in the coming year it will be down by a half. But it is still one of the highest in the world, so the Government are right to be taking action to bring it down further.
I will now deal with some of the detail of the Budget, but in the light of the number of Members who wish to speak, I will limit my remarks to three or four main areas. First, this was a Budget for savers. Social media has been awash with the hashtag #savingsupported, and with good reason. The reforms to individual savings accounts and raising the limit to £15,000 could benefit up to 513,000 ISA holders in the west midlands alone. Cutting the savings income tax to zero on up to £5,000 could benefit up to 131,000 savers in my region.
The Budget will help more of my constituents to save for a home, save for their retirement and save for their family. I welcome the additional support for savers, so that more people can provide a secure future for themselves and their families. Although we are getting on top of our debts as a nation, for many decades Britain has borrowed too much and saved too little. It is therefore right that hard-working people keep more of what they earn, and of what they save. Support for savers is, rightly, at the centre of the Budget.
The personal tax changes will also be widely welcomed in my area. The increase in the personal allowance in 2015-16 will lift 27,000 people out of income tax altogether, and 2,120,000 people will see an average real terms gain of £62. Again, these are west midlands numbers and the national figures are, of course, even more impressive.
The next area I want to deal with, after help for savers and cutting taxes, is the welcome news on pension flexibility, particularly with the fundamental reform of the taxation of defined contribution pensions. As the hon. Member for Somerton and Frome (Mr Heath) has just said, from April 2015, the Government will legislate to remove all remaining tax restrictions on how to access defined contribution pension pots, which means that no one will have buy an annuity if they do not want to. Those who still want the certainty of an annuity, as many will, will be able to shop around for the best deal. There will be no punitive 55% tax rate for those who take more than their tax-free lump sum. It will still be possible to take 25% of the pension pot tax free on retirement, but what is taken above the tax-free lump sum will be taxed at normal marginal rates, not 55%, as at the moment. We will have a new guarantee, enforced in law, that everyone who retires on a DC scheme will be offered free, impartial, face-to-face advice. As economist Ros Altmann summarised:
“No more annuity will be required. No 55% tax charge, only marginal rates. Everyone will get access to face-to-face advice to make the right choice for themselves and their family.”
As the Secretary of State for Business, Innovation and Skills said earlier, we now know that manufacturing halved under Labour, with all bets effectively being on the City of London, and look where that got us. Now manufacturing is growing again, and jobs are being created in Dudley and the black country, and across the country. Week in, week out, I visit businesses, often in manufacturing or engineering, or connected to those industries, and the optimism I am finding is reflected in the figures, with 1.7 million new private sector jobs having been created since May 2010. Investment and exports are also up. But we have 20 years of catching up to do, so the Government are right to be backing businesses that invest and export. With the help of the British people, the Government are turning the economy around. The reward is economic security for the families of Britain. The Budget is part of the long-term economic plan—a plan that is delivering economic security for families in my constituency and throughout the country.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
My first comments are about the nature of growth and the Chancellor’s triumphalist approach to the growing economy. Yes, it is growing, and that is welcome, but this is not economic growth led by sustainable increases in investment—that has been pretty stable during the last few years. It is not led by an increase in exports; again they have not reached anything like the level needed to get us out of recession. Rather it has been led by an increase in consumption and household debt, and by a housing-fuelled boom in London and the south-east.
Of the job growth in the private sector, 80% has been created in London. That totally contradicts the Prime Minister’s assertion yesterday in Prime Minister’s questions when he claimed that it was the other way round. I checked with the Library to see whether my insight into this was incorrect, but it referred me to the Centre for Cities study, which clearly says that 80% was concentrated in London. I hope that the Minister can explain the apparent contradiction between the Prime Minister’s assertion and the best available evidence.
I would like to focus for a few moments on what I consider to be a huge potential black hole in the Budget projections. In the autumn statement—the hon. Member for Somerton and Frome (Mr Heath) commented on the connection between the autumn statement and the Budget—the Chancellor announced funding for an additional 60,000 higher education student places, funded by the sale of the student loan book. He said:
“The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential.”—[Official Report, 5 December 2013; Vol. 571, c. 1110.]
When the Minister for Universities and Science appeared before the Business, Innovation and Skills Committee, he was questioned about what appears to be an inherently risky way of funding a long-term commitment. He informed us that it would be fully funded irrespective of the sale of the student loan book. That is welcome, but it has not been factored into any OBR predictions I have seen. The cost could be as much as £12 billion. The Government’s own advisers, Rothschild, said that without sweeteners and some form of subsidy, only £2 billion might be reclaimed.
That leaves a potentially huge hole in the Budget predictions, and I have not seen it adequately covered by the OBR or in the Red Book. When challenged on that, the Minister said that the Rothschild report is old and that market conditions have changed. If that is so, I would reasonably expect the Government to be confident enough about their assertion to put forward the figures and funding bases on which the policy has been built.
The other part of the potential black hole is the increasing resource allocation budget charges on the student loans arising from the increase in default rates. It is estimated that if those reach 47%, the cost of the current student-funded scheme will outweigh the old system. We are already at about 40% to 42%, and the latest predictions indicate that it will reach the threshold very shortly. That is acknowledged by the OBR, although there is no acknowledgment of how this will be funded.
I believe that there is a huge potential hole in the Government’s Budget predictions, because they are locked into a financial funding model for higher education that is increasingly becoming unfunded. Furthermore, they have grafted on to it a welcome commitment to funding extra places, but on the basis of a model that does not appear to be viable and a funding regime—the sale of the student loan book—that looks unlikely to realise the necessary amount of money.
I would like to have been able to talk at some length about exports. I will simply quote a press release from the Black Country chamber of commerce:
“This was nothing more than a political budget with a nod to Scotland and another example of the disconnect between politicians and the world of business”.
The fact is that the rhetoric does not match the reality on the ground.
Sir Edward Leigh (Gainsborough) (Con)
I may not agree with all that the hon. Member for West Bromwich West (Mr Bailey) says, but he always speaks with calm courtesy and forensic good sense, so we are grateful for his comments. I am also grateful that my hon. Friend the Financial Secretary is sitting on the Front Bench. I hope that what I am going to say is not entirely off message from what the Government believe. Because I respect and admire him so much, I have a sneaking suspicion that privately he might agree with much of what I will say.
The fact is that, for all the huff and puff, when it comes to what it actually puts into and takes out of the economy, the Budget represents a 0.3% change—£2 billion out of £732 billion of spending. That is somewhat worrying when we consider the very big challenge we face on deficit reduction and, following what the hon. Member for West Bromwich West said, what could be a debt-fuelled boom, which is the traditional British way of climbing out of recession.
I wanted to try to start on a positive note, however, so I should quickly say that I think this Budget will be remembered for its entirely freedom-loving, Thatcherite, people-trusting measures on annuities. However, those points have been made repeatedly, so I do not need to labour them.
I want to talk about what is happening to higher rate taxpayers. The top 5% pay 45% of all income tax. The top 1%—just 30,000 people—pay 30% of all income tax, which is more than the lowest 50%. Let me say gently to the Business Secretary—he is not here, but I am sure he will read Hansard avidly—that I think he was being slightly disingenuous when he replied to my intervention in which I bemoaned the fact that we are not indexing the higher rate tax. He said, “Well, we’ve made a start”, but it is a very small start. Under this Budget, 400,000 more people will still be dragged into paying higher rate tax. Some 1.4 million middle-earners—small business men; managers; hard-working nurses, matrons and teachers at the top of their professions; police sergeants—have all been dragged into this higher rate of tax during this Parliament, on our watch.
The higher rate of taxation is almost turning into the standard rate. The top half of taxpayers contribute 90% of all tax intake. When Nigel Lawson introduced the 40p rate in 1988, it was paid by just 1.35 million people. Now, 4.5 million people pay the higher rate of tax, and by 2015 that figure will have risen to nearly 5 million. I personally do not believe that this is what the higher rate of tax was designed for. It should attack people on higher rates of earnings, and that means those who earn a reasonable amount of money; it should not attack police sergeants, senior matrons or classroom teachers. That is wrong and inequitable.
We need from the Government a sense of mission and direction, and the sense of mission and direction that I want to see is one that is aimed at simplifying all taxation. After every Budget speech—rather like the Secretary of State, I think I have now sat through 18—I make the point again and again that simplification pays off. When we reduce taxation on the top earners, as we saw when we reduced the top rate of tax from 50% to 45%, we encourage enterprise, remove avoidance and even evasion, and generate more income and growth. This is a Conservative philosophy of enterprise and rewarding hard work, and that is what a Conservative Government must be about. I earnestly enjoin the Government to try to right this inequity against higher rate taxpayers in their next Budget, or, if not, in the manifesto.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I want to touch on a couple of issues in the brief time available.
The first of those is the changes to the carbon price floor, on which I intervened on the Business Secretary earlier. I probably should not be surprised, but I am concerned, that he did not appear to know that the compensation scheme for the carbon price floor announced in November 2011 and due to come into effect in April last year has so far paid out precisely nothing to energy-intensive industries. When energy-intensive businesses such as the brickworks, steel plant and glass fabricator in my constituency hear that there will be a compensation package in relation to the renewables obligation and feed-in tariff, it is not surprising, given that it seems highly unlikely that the back-dated scheme that they were previously promised is going to be delivered, that they are dubious about whether they will ever receive this benefit.
There is, overall, a supreme irony in the Government’s moves to limit the impact of the carbon price floor, characterising it as a green tax. At last year’s Conservative party conference, the Energy Minister, the right hon. Member for Sevenoaks (Michael Fallon), referred to it as “assisted suicide” for manufacturing industries, seeming not to realise that it was his Chancellor’s policy and that his party voted for it, whereas we opposed introducing it without an assessment of the impact on manufacturing industry.
The Chancellor was at it again yesterday when he implied—the hon. Member for Clacton (Mr Carswell), who is no longer in his place, said this in his speech, too—that the answer is shale gas and that it could have the same impact in the UK as it has had in the US. That is a simplistic and highly misleading extrapolation of the US experience, given the different geology, land rights and, crucially, the US’s inability to export shale gas. Those simplistic extrapolations are either ill informed or spectacularly and deliberately ignorant.
The Office for Budget Responsibility figures for oil revenues are not just a salutary warning against the danger of over-reliance on a resource that is by definition declining and by record volatile. The Scottish National party is engaged in a process of taking the most optimistic assessment of gross value and suggesting it as state revenue in order to seek to persuade my constituents and others to vote to leave the UK, but the lesson from the figures is that the pooling and sharing of resources is a much more stable proposition with regard to maximising economic recovery from what Sir Ian Wood’s report, whose recommendations the Government seem to accept, rightly refers to as a mostly mature basin.
The Chancellor also referred yesterday to the extension of the film tax credit, which is welcome, but many British films today are co-productions. Indeed, the critically acclaimed “Under the Skin”, which was filmed in and around Glasgow, stars Scarlett Johansson and was released last week, is just one recent example of a stunning co-production from Britain and other countries. The marginal extension of the tax credit has been hindered by the news that just last week Her Majesty’s Revenue and Customs issued a clarificatory note stating that co-productions are excluded from access to funding from the enterprise investment scheme. I asked the Minister responsible for the arts, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), about this during Culture, Media and Sport questions last week, but he did not appear to know anything about it. A theme is developing of Ministers not knowing the impact of their own policies, and that is a concern.
I want briefly to refer to changes to gambling. Increasing the tax take from fixed odds betting terminals does nothing to deal with the adverse effects those machines have on many communities up and down the country. Indeed, it may have the opposite effect and put the Treasury in the box of those defending the vested interests in high-stakes, fast-pay gambling machines that are ruining many lives.
Finally, I welcome the change to the bingo tax, but the Tory party chairman—who will, I am sure, shortly be promoted to a senior ministerial position—let the cat out of the bag last night with his post, infographic or whatever he is trying to call it referring to bingo as something that “they” enjoy. I say to the Financial Secretary that I am a fairly frequent visitor to the Mecca bingo club in Rutherglen, which is a very good community institution to which many of my constituents enjoy going to interact socially as well as to gamble as a leisure pursuit. They tell me that what they wanted from this Budget was some real action on energy bills, particularly given that they have gone up by £300 at a time when, latterly, gas wholesale prices have been largely stable. They want to know why it is that the bankers bonus culture has been extending and deepening in this country. They want to know why it is that the primary act of this Chancellor and his ministerial team is to institute a tax cut for millionaires rather than for hard-working people. For them, this Budget has precious little.
Mr Robert Syms (Poole) (Con)
I welcome the Budget, not just in and of itself specifically, but because it is part of a long-term economic plan. It is important that Governments look at issues on a long- term basis. I think we sometimes forget the depth of the crisis of 2008. There was a 7.5% fall in output and it was the biggest recession in British history, significantly worse than that of the 1930s. On top of that, there was a major banking collapse and, following that, a euro meltdown and crisis. Therefore, the stability provided by the coalition Government’s steady plan to rebalance the British economy is a sensible and welcome development.
We have been blessed over the past three or four years by lower levels of unemployment than might have been predicted and we have started to see a recovery and higher levels of employment. The reason for that is that British workers have reacted in a rational and sensible fashion and have tried to price themselves into jobs. The consequence of that is that living standards have fallen and, as the Institute for Fiscal Studies has said, the fall from about 2007-08 until last year was about 7%. If there is a massive fall in output, it is inevitable that living standards will fall.
We are now starting to see much more evidence of a proper recovery, with pay picking up, inflation coming down—they should cross during the year—and the Government making a great priority of raising tax thresholds. If we are reforming welfare to encourage people to take jobs, it is both logical and sensible to make many jobs more attractive by reducing tax. I have heard some of the criticisms, such as, “What if you don’t pay tax?” Part of the problem of the Government taking 3 million people out of the tax system is that fewer people will pay tax at lower levels. However, it is good to provide more incentives within the British political system.
We are getting more growth, and we are starting to see a recovery in investment. If the eurozone, which could still be problematic, settles down, there is a prospect of higher exports. I welcome what the Government have done in providing more export credit. I also welcome what they have done for manufacturers by addressing some of the problems with the EU carbon floor price, which would have made many of our heavy or energy-intensive users uncompetitive. The key point is that the Government have listened to representations and made adjustments to help British business.
My principal point is that I welcome the changes in savings and pensions. Throughout most of my time in the House, people approaching the age of 65 have come to me to bemoan the fact that they are forced to buy an annuity, and that it will remain with the insurance company when they die. We are giving people the real freedom for which we campaigned in opposition and that we had in our manifesto, and it is absolutely right to do so. Moreover, we are allowing people to make their own decisions about how they spend their own money. It seems to me rather bizarre that people have a pension pot, but then have the problem of trying to calculate at the beginning of the year how much they can take out. I see no reason why we cannot just trust people, and ensure that they can make their own decisions about their retirement. That requires a bit of maturity and we will provide more advice, but it will be a very real freedom for many pensioners in Poole.
In addition, I welcome the Government’s proposal for the bond that, at least for a time, will give a higher rate to many pensioners who have not had a big rate of return on their savings. Quantitative easing has made life very difficult for pensioners with savings, and the bond is one way to offset that in these extraordinary financial times. Again, the Government have listened and have responded to that particular problem.
We are encouraging savings. We are giving pensioners more flexibility. We are addressing the needs of and helping exporters; we have seen many good examples in the car industry and aerospace. We are helping heavy manufacturers, who have real problems with the carbon floor price. The Budget will help jobs and growth. We are seeing the start of higher productivity and higher investment. I hope that that continues, and that our country goes from success to success.
Gavin Shuker (Luton South) (Lab/Co-op)
It is extremely gracious of you to call me to speak in this debate, Madam Deputy Speaker.
I want to say a few words about a genuine long-term plan—Government Members seem to use the phrase “long-term plan” quite a bit—for work. It is clear that this Budget has ducked the key challenge of how we ensure that as the number of jobs in the economy increases, the quality of those jobs improves at the same time.
There has been much talk in this place over many years—not only by Government Members but by Opposition Members—about where improvements to the British economy will come from. There has been a lot of talk about entrepreneurialism, finance and different sectors of industry, but we tend not to step back to talk about the quality of work, even though work is fundamental to how we generate growth in our economy and how people find dignity during most of their waking hours in the day.
My broadest concern is that as we talk about the effects of this Budget—fiscal measures here, changes to taxation there—we may to a degree miss the point. We know that what makes work satisfying to people is autonomy, mastery and purpose. I fear that those three values are getting lost in the recovery that is under way. I shall suggest a few ways in which we might respond through policy to improve the quality of work for millions of people up and down the country.
It is a tragedy when people find themselves unemployed and when there is long-term unemployment. In Luton, 950 young people are without work and are claiming jobseeker’s allowance, and 1,300 people of all ages have been out of work for more than 12 months. Behind each figure is a human tragedy that affects many families. Older people who find themselves out of work find it incredibly difficult to get a job, and we know that many of them will not find one in the current economy.
At the same time, there is a cost of living crisis. Wages and prices have become decoupled. It is estimated that it will take 15 years for wages to recover and get back to the consumer prices index level of inflation. It is debatable whether they will ever reach the retail prices index level.
We need to tackle the issue at both ends: work and the quality of that work. On the quality of work, we have seen a tripling of the number of zero-hours contracts. More people are working in the economy, but many of them are on zero-hours contracts and have little job security. Those who are still in work have had their rights taken away. For example, there are the challenges with tribunals, which we have discussed in the House before. We cannot win in a race to the bottom. Many people still cannot get a job. There is a lack of dignity in not having a job, but there is also a lack of dignity in having a poor quality job. This is a long-term challenge not just for this Government, but for whichever Government find themselves in power next.
Labour’s jobs guarantee could be a necessary first step in allowing young people in particular to find work and get back into the rhythm and dignity of work. We then need to look at the quality of the work and the remuneration for it. That is why we need an expansion of the living wage. Our policy of a 12-month tax rebate for low-paid workers who are bumped up to the living wage for the first time, which would pay for itself over time, would be extremely helpful, as would the reintroduction of the 10p rate. That would be hugely important in encouraging people to get back into work.
We need action to meet the challenges of our economy. An alarming statistic that other Members have talked about is the productivity gap. Output per hour in this country is 21% lower than the G7 average. That hints at a lack of business investment in machinery and so on.
I return to autonomy, mastery and purpose. Where will the high-skilled jobs come from in this economy? When will we recognise the cost of living? Many people will look at the actions of the Government and conclude that in the Budget they have ducked the challenge. If they were running a business the way they are running the economy, they would be sweating the assets to get growth. I think it is fine to sweat the assets for a period, but we must recognise that the greatest asset we have is the people of this country, and they will not put up with a Government who sweat the asset that is their work.
Neil Carmichael (Stroud) (Con)
It is a great honour to follow the hon. Member for Luton South (Gavin Shuker), not least because he and I will be working together on the all-party group on polar regions, which is absolutely fabulous.
The Budget is a staging post in the mission to rescue the British economy. It is an important staging post and it signals some important messages. First, I will introduce some thoughtful points on productivity, which we have discussed from time to time in the Chamber. Increasing productivity is the way to deal with the cost of living crisis, because we need a work force who are skilled to such a level that we can enhance our capacity in manufacturing, engineering and related activities. The importance of ensuring that we have a skilled work force is embedded in our long-term economic strategy and is part of the Budget because, as I have said, it is a staging post.
In my constituency, I have promoted manufacturing and engineering through the festival of manufacturing and engineering, which is designed to ensure that young people are introduced to the advantages of working in manufacturing and the opportunities that are provided by a career in engineering. They will end up dealing with the cost of living crisis by contributing to increased productivity and an economy that blasts forward by competing powerfully not just in the EU, but in the global economic race that we are undoubtedly in.
I am pleased to welcome the changes to pensions, annuities and so forth. Encouraging people to save is a really important part of our strategy, because the savings ratio in this country has never been worse. The Chancellor has recognised that and taken steps to encourage people to save. That is what the changes to pensions and annuities are fundamentally all about. We should welcome them as a huge step in the right direction, not only in ensuring that elderly people have choice but in improving people’s overall capacity and willingness to save. They are great news.
Something else that is important and relevant to my constituency is the framework that we have already created to encourage investment in infrastructure. We really need to do that, and I could mention a lot of projects in my constituency that will need investment in the immediate future. One is a potential new bridge across the Severn to ease congestion on both the Forest of Dean side—my hon. Friend the Member for Forest of Dean (Mr Harper) has made that point several times—and my side, where such a development would enhance economic growth opportunities in an area where they need to be created.
The changes to ensure that firms that are high energy users will benefit is great news for my constituency. We have a lot of companies that have a huge appetite for energy. BPI, a recycling firm, is a case in point. It has sites across the country, which will all benefit from the changes.
We have to ensure that our overall package is continued with, and that is why it is important to talk about the long-term economic plan as frequently as we do. Part of that plan is to reduce the deficit. Of course we are disappointed that the deficit is not as small now as we had hoped, but we are travelling in the right direction and can say that it will be further reduced in significant chunks. That is what the Chancellor has promised and will now deliver. That is the bedrock of our economic plan, because we cannot have sustainable growth if we are constantly threatened with high interest rates and constantly undermined by having one of the largest deficits in the western world. That part of the long-term economic plan must not be forgotten and must be promoted whenever possible. The real economy, which I have been talking about, is the key to delivering jobs, tackling the cost of living and putting Britain back into the competitive place that it should hold globally on the economy and growth.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is disappointing that this has turned out to be a Budget for the few, not the many. I am particularly concerned that it has delivered nothing to support young people and the long-term unemployed, and it is on that point that I wish to make a few remarks.
We all know that young working families are struggling. Last week I met Sarah, a young mum of two, in a local supermarket. Two years ago, the jobcentre forced her to go on a course at a time when she was very ill during her first pregnancy. The tutor on the course sent her home almost as soon as she arrived, and her doctor then signed her off work for the pregnancy lest she even lose the baby. Her partner has been out of work for three years, which has had a knock-on effect on his self-esteem. He is a young man struggling to find work and wanting to support his young family, and he has felt that the courses being offered to him are well below what he needs and are doing little to increase his chances of work.
I met a mum who was concerned about her son’s future. He has been on a zero-hours contract with no certainty about what work he will get or on what day. The stress that it has caused the family is enormous. Imagine not being able to plan if and when to do a course of further learning, or when it might be possible to see a doctor, care for a family member or go out on a certain day. Zero-hours contracts definitely need reform.
More than 1 million 16 to 24-year-olds in the UK are not in education, employment or training. Long-term unemployment is up more than 300% since 2010, and long-term youth unemployment has almost doubled in that period, yet pay is still rising faster for bankers than for the average worker. This was not a Budget for those such as the disabled man I met recently who was hit by the bedroom tax; for the families and parents struggling with rising child care costs; or for small businesses struggling to pay their business rates.
I welcome the reduction in bingo duty and I am pleased that the Government have listened to calls from Labour and the public about reducing that duty. I thank many of my constituents, including Mike Ellis, a bingo club manager in Feltham, for their work on that matter. The fact remains, however, that the recovery is not yet reaching the many. The Chancellor and the Prime Minister often talk about getting young people into work, but I am concerned that there is no actual plan for young people. Making school-based work experience optional rather than compulsory, as the Government did in September 2012, is one shocking example of that—a move that was opposed by Labour and by 89% of those who took part in the Department for Education consultation. In the past year alone more than 64,000 fewer young people have been able to take part in work experience, compared with the previous year.
The young people of today are the taxpayers and leaders of tomorrow, and we have a responsibility to hold open the doors so that they can succeed. That is why getting young people back to work is a priority for Labour. It is about our duty to the next generation, to give them the chances they need, and confidence that the Government are on their side. Labour would put young people back to work with a job for every unemployed young person, paid for by a tax on bankers bonuses. Young people also need a place to live and bring up their families, and Labour would build up to 200,000 homes a year by 2020. Tackling the housing crisis is not just about fuelling demand, but building new homes and increasing supply.
We would freeze energy prices to help tackle that modern scourge: the cost of living. Labour would get finance flowing again to businesses, with a proper independent business investment bank and a network of regional banks to support businesses that need finance, not just in London but in our industrial centres in the north that have been so neglected by the Government and on which our national economy depends.
This country needs an active Government with the courage to bring forward bold policies to build a strong, sustainable economy that generates wealth for the many, jobs for the unemployed, and prosperity for all. Instead, it is a shame that this out-of-touch Chancellor, and Prime Minister, has delivered a Budget that caters for the privileged few, while working families and mums like Sarah fight for scraps from his table.
Christopher Pincher (Tamworth) (Con)
It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra) because it gives me an opportunity to let her know that in my constituency, youth unemployment has fallen by 40% in the past 12 months. I am also pleased to speak in this Budget debate on business because as we all know—at least, as we should know—it is business, not the Government, that generates wealth. Wealth generates jobs, and jobs lift people out of despondency and dependency.
Chloe Smith
Does my hon. Friend agree that it is also possible for Members of the House to work with businesses in their constituency and do something about unemployment? I gave the example of Norwich for Jobs.
Christopher Pincher
I agree with my hon. Friend. I hold an annual jobs fair, and last year 300 to 400 jobs were available to the 176 people who came to look for them. There were more jobs available in my constituency than jobseekers at the job fair, which is an indication of how our economy in the midlands, and particularly in Tamworth, is developing.
I agree with the hon. Member for Feltham and Heston about bingo and the change to gross profits tax. That tax was introduced in 2009 and created an anomaly because it meant that that soft gambling industry was taxed at 20%, compared with most of the rest of the industry at 15%. Added to the fact that bingo operators cannot reclaim VAT on their investment or refurbishment costs, it means that many operators have to carry a cumulative and punitive tax, equivalent to VAT of 32%. That was stifling the industry, with one bingo hall per week going to the wall. The Chancellor’s changes will mean more money for stakes, which is good for punters, and more investment in bingo halls and more jobs—a good thing that will also increase tax yield.
I am very pleased to see the changes to air passenger duty and start-up support for new routes. Birmingham airport, my local airport, will benefit from that. It is currently extending its runway so that it will be able to take long-haul flights to and from major markets in China and India. If the Treasury is listening, it can provide further support by adding Birmingham airport to the regional air connectivity fund list.
I hope the Treasury will work closely with the Department for Transport to consider the Whitacre link, a railway line axed by Dr Beeching. The line runs through Tamworth to Birmingham airport, and new track would reduce travel time from Tamworth to Birmingham airport from 40 minutes to just 18 minutes. That is the sort of local, sensible infrastructure development that business people in my constituency want to see. My hon. Friend the Minister knows my views on HS2. If it goes ahead, it will not be enough for it just to link our major cities. We need to improve the infrastructure around those major cities to realise the potential benefits of HS2. Building the Whitacre link would be one way of doing that.
I welcome the continued drive down of corporation tax. That will help to expand businesses and create jobs. I hope the Chancellor will not see the 20p rate as an end in itself, but as a means to an end: matching the Irish 12.5% rate of corporation tax. If we can get down to such a level, we will attract businesses to Britain that currently go to Ireland, and build a better and stronger economy. That is what business folk in my constituency would like to see.
Despite the rather gloomy concerns of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), I support and approve of the Government’s determination to drive down the cost of energy on businesses. The carbon price support rate, at £18 per tonne of carbon, is a good move. I think the Liberal Democrats would prefer to see about £30 per tonne by 2020, but capping it at £18 will reduce about £50,000 of cost for small and medium-sized businesses in my constituency.
There is, however, an energy elephant in the room: the huge amount of infrastructure spend we need to undertake in the next 10 years to keep our lights switched on, our water warm and the wheels of industry turning. The big six, which are already highly leveraged, can probably add no more than £70 billion to the £110 billion cost. If we are to get the £40 billion we need from independent players, and not rely on the taxpayer or the consumer to foot the bill, we need to ensure that electricity market reform and the signals to investors are right, otherwise there will be a cash crunch.
In general terms, the Budget was good. It was a Budget for business. In my constituency, businesses are upbeat and they say that they expect to grow. BMW is coming to Tamworth this year with 100 new jobs. Let us have more of the same: let us have more Budgets for business.
Yvonne Fovargue (Makerfield) (Lab)
I welcome one measure in the Budget that has had relatively little publicity: start-up support for regional airports to link up with future markets by supplying new routes. Manchester airport and other regional airports are key drivers of local economies. Encouraging new routes and businesses into the regions is vital, and I look forward to seeing more details on that.
I want to move on to one of the central planks of the Budget: the measures for savers. Help for savers is welcome, but this help does not target those with little or no savings. A report produced by HSBC last year showed that 25% of people across all age ranges have little or no savings. Indeed, 33%—a third—of people in the 18 to 44 age range have no savings at all. On the basis of that evidence, HSBC estimates that 8 million people in the United Kingdom have no savings.
Many of my constituents can relate to that. They are indeed the “makers and doers” referred to by the Chancellor, but they are not making do. They are juggling their finances, with no spare money to save for a rainy day because there has never been enough sunshine. These are the people who turn to payday lenders when there is a broken washing machine, or when the children need new shoes and school clothes. If the Chancellor is serious about keeping people out of the hands of the payday lenders or “pay weekly” stores such as BrightHouse, they should be helped through savings measures. They are the people most at risk of descending into a spiral of debt and who end up seeking help from citizens advice bureaux or StepChange. In fact, figures from StepChange show that only 5% of people who have sought its help have any savings.
Simplifying and raising the limits for individual savings accounts are likely to make little difference to those in middle and low-income households who have few if any savings. Just one in four households with incomes of less than £400 per week has an ISA, compared with half those with incomes between £700 and £1,000 a week. Research shows that matched savings and savings account bonuses give lower-income households a much stronger incentive to save than interest rates or tax reliefs.
The additional ISA changes will have cost the Exchequer £565 million a year in lost tax on savings by 2018-19. Surely that money could be better spent on providing savings account bonuses or matched savings targeted at those in lower-income households, who have the least resilience to financial shocks. In fact, the matched savings schemes introduced by Labour were one of the first things to be abolished by the coalition Government in 2010, on the grounds that “the country could not afford them”. As the money and the will to encourage savings clearly now exist, why do the Government not consider reintroducing, and even expanding, such schemes? A savings target of just £500 for low-income households, which represents just below the average payday loan debt owed by StepChange clients, could be just that “rainy day” buffer that people need to keep the wolf—or perhaps I should say the shark—from the door.
Yet again, we have a Budget that does little for those on the very lowest incomes. Raising the income tax threshold to £10,500 will do significantly more for those who are paying the higher rate of tax and earning up to £100,000 a year. They will gain £1.92 per week, whereas those who are working full time on the minimum wage are highly likely to be receiving housing and council tax benefits, and will therefore gain just 29p per week. At this rate, even if they saved every penny of the increase, it would take more than 100 years for them to be able to take advantage of the new ISA limit, and 33 years for them to have the buffer of £500. No wonder unexpected expenditure falls hardest on those households, making the need for incentives to help them to save more urgent than ever. No wonder a payday loan is taken out every four seconds in this country.
This is not a Budget that helps the hard-working families in my constituency who face a cost of living crisis. It is not a Budget for those who are struggling to get by, and to whom saving even £500 seems an impossible dream. The Chancellor could have helped those people, but he chose not to. He could have taken on the payday lenders by helping to eliminate the need for them, but he chose not to. This is not a Budget for the many in my constituency; it is a Budget for the few.
Richard Graham (Gloucester) (Con)
Yesterday we heard a Budget which, as The Sun put it, we can all cheer—but not quite all, because the response from the Leader of the Opposition was a litany of class warfare slogans, along with the line “You’re worse off under the Tories”, which, as The Sun rightly concluded, could convince only those with the memory of a goldfish. Today we had another goldfish to entertain us. The shadow Chancellor was more entertaining than his boss, but there was little danger of the truth interrupting his cracks; for he has form, and—whether we are talking about his claim of an end to boom and bust, his prediction of a triple dip, or the flatlining gesture that we saw for nearly three years—the truth has consistently been the opposite of what he says. So when he claimed there was nothing in this Budget to help with the cost of living, he only confirmed to everybody listening that there was, in fact, plenty, and that the statement was consistent with his role as the best reverse indicator in politics.
My constituents in Gloucester will have been absolutely delighted with another axing of Labour’s hated fuel escalator. Some 25 million people around the country will keep £800 more a year from their earnings and 1.5 million lower-income pensioners will not pay 10% tax on their first £5,000 of savings: these things make a difference.
The Opposition is off the mark not just on those changes, but also in their response to some of the smaller, but symbolic, steps, like the changes in bingo tax and the beer duty escalator. I am sure the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) supports his constituents who play bingo and recognises the social benefits of that, but can he explain to them why his Government taxed bingo more than any other form of gambling throughout their 13 years in office?
The shadow Chancellor derided the cut in beer duty. I invite him to come to the second Gloucester beer festival on 4 April this year. The Gloucester brewery was created three years ago; for all 13 years of the Labour Government we did not have a brewery at all, but we do now. Let him come and meet the beer lovers in Gloucester and try to convince them we should get back on to his hated beer duty escalator.
The truth, too, is that we know what manufacturing needs, whereas under the previous Government manufacturing halved. My city, the city of Gloucester, has always made things. We have always manufactured, but manufacturing was the main loser when we lost 6,000 private sector jobs under the previous Government. Between 1997 and 2010 the number of apprentices went down so sharply that by the time of the change of Government there were only 25 people going into Gloucestershire engineering training. Today the figure is more than four times greater.
The changes in the carbon pricing for heavy energy users and the extension and doubling of capital allowances to £500,000 a year are incredibly important to a city such as Gloucester, because our engineering is close to capacity and it needs the stimulus to invest and the opportunity to expand and to grow. If it gets that, it will go on creating more jobs and more opportunities for the young people of my city. Already the numbers of new apprentice starts are four times higher than in 2009-10. This is not about cost of living in terms of energy prices miraculously suddenly being halved; it is about cost of living in terms of the opportunities for young people.
The shadow Chancellor recently came to Gloucester. He did not stay for long and he did not visit a business—he certainly did not visit a manufacturing company and see the transformation that has taken place in that sector over the past four years—but he did make a speech to Labour party members and he spoke briefly to the press afterwards, telling them he was deeply concerned about the rate of youth unemployment in Gloucester. In one respect he was correct in saying that because we always need to do more—we must go on bringing it down—but actually the figures have come down sharply and are some 25% lower than they were at the last general election. Youth unemployment is coming down and will go on coming down.
Today we have been discussing a Budget for people who make things, and in a city that makes things, such as Gloucester, that is good news indeed.
Alison Seabeck (Plymouth, Moor View) (Lab)
The Chancellor talked about an economy that is now improving and I do not think anybody would be so churlish as not to acknowledge that there is some improvement, but he also suggested there is further pain to come and it is clear to everyone outside this place, if not to those on the Government Benches, which people and families are going to bear the brunt of the prolonged period of austerity. It will not be millionaires; it will be low-income families, who are not actually terribly impressed by the raising of the tax threshold when the overall cost of living increases are hitting them a great deal harder and when, for those who will be in receipt of the new universal credit, almost every penny will be clawed back.
Citizens Advice tellingly confirms that those earning around £100,000 will benefit more than those earning the minimum wage. What we need, and what was missing from the Budget, is positive news about infrastructure investment in our region, such as the building of homes that families and first-time buyers can afford to rent or purchase, and major projects such as the diversionary rail line to ensure that the region is resilient in severe weather events. I agree with the hon. Member for Somerton and Frome (Mr Heath) that expectation is elevated in the south-west about what the autumn statement might contain.
The Labour leader of Plymouth city council has made it clear that investment in new signalling to increase line speeds, new rolling stock and improved rail resilience would help to generate some 32,000 new homes and 42,000 new jobs in the south-west. That investment would bring work, taxes would roll into the Treasury, the south-west economy would benefit and large and small firms would feed into the procurement process, supporting all that growth.
Such investment would undoubtedly support the excellent work of our universities, which could without doubt do even more to support entrepreneurs. Plymouth university is working closely across local enterprise partnership boundaries in support of the work being done by Sir Andrew Witty to drive economic growth.
There were some positive measures in the Budget to help business. I welcome the support for exports, as I welcome the reduction in bingo tax, because it is something on which I have campaigned under both the previous Government and this Government. Devon air ambulance will be much better placed to continue to offer its life-saving service following the changes to VAT on fuel. There was no mention of the business rate change, which many small businesses in Plymouth would have liked to see. I have concerns about the pension proposal, given the history of mis-selling and given personal experience of someone who was persuaded, with expert advice, to take equity from their mortgage while they were seriously ill in such a way that after their death, their partner was left in a dire position. The quality of the advice offered is a serious matter. There is also the question of whether people can get advice on more than one occasion.
I was accused by the Pensions Minister, the hon. Member for Thornbury and Yate (Steve Webb), of being patronising because I dared to ask whether women of a certain age—roughly my age—would face disbenefits as a result of some of the pension changes. He failed to answer that question, and he also failed to offer to place the evidence, particularly that concerning women and the wider risk assessment, into the Library for hon. Members to see.
My colleague the Labour candidate for Plymouth, Sutton and Devonport, Luke Pollard, yesterday produced figures showing that in Plymouth the average family is about £1,800 a year worse off because prices are rising much faster than wages. When we consider that the average income in Plymouth is about £20,000, not the £100,000 mentioned by the Chancellor yesterday—he is clearly very out of touch if he thinks that that is an average wage—£1,800 is a huge loss. How is it fair that nurses in Derriford get only a £250 pay rise, while higher- rate taxpayers become significantly better off?
It is the same old Tories. I look back at my father’s election address from February 1974, in which he highlighted tax cuts for the rich paid for by price rises for the rest, rising house prices and rents, and the worst house building record since 1963. Of course, we are now facing the worst housing building situation since the 1920s. The attempts to rebrand the stalled Ebbsfleet development would be laughable if the problem were not so serious. Initially, the Minister without Portfolio, the right hon. Member for Welwyn Hatfield (Grant Shapps) talked about building 22,000 homes there, but we are now being promised only 15,000 homes on a site that has little inherent land value.
If the Chancellor is serious about ensuring that the economy continues to grow and does not falter, he must consider the measures proposed by my right hon. Friend the shadow Chancellor—
Mr Robin Walker (Worcester) (Con)
The hon. Member for Plymouth, Moor View (Alison Seabeck) has just mentioned her father’s election address, and I am reminded of my father’s election addresses about how Conservatives had to clear up the mess that Labour left behind.
Like many Members across the House, I am passionately focused on employment. We needed the Budget to encourage business investment and help the recovery, which is gaining pace, to deliver more and higher-quality jobs. The hon. Member for Coventry North West (Mr Robinson) made an interesting point about ensuring that those jobs deliver greater productive capacity, and I agree with him that we need to do that.
The claimant count in my constituency of Worcester is down from 2,545 immediately before the election—and from a peak of 2,700 under Labour—to around 1,900 now. Youth unemployment peaked at 800 under Labour and is now below 500. That is much better, but there is no room for complacency. In fact, we have seen some small rises in unemployment in recent months, which I abhor. I have said that we need this Budget to deliver investment in jobs.
When I talk to local businesses, especially manufacturers, about what they need if they are to invest in jobs, they tell me that they need support to invest in plant and machinery, which can raise the productive output of each job. We have seen that support in this Budget. They also want support for research and development that will anchor manufacturing jobs in this country, including the jobs at Yamazaki Mazak, which has its European research headquarters in Worcester. They need help with the cost of employment, and this Budget has introduced the implementation of the employment allowance, which will provide a huge boost to businesses large and small in regard to the number of people they can employ.
It is interesting that, at the start of this Government, we got rid of Labour’s jobs tax—an increase in the cost of national insurance for every business and employer—and that, as we come towards the end of this Government, we are taking a further step forward in the form of the employment allowance. It will provide a real incentive to take young people on, and taking people under 21 out of national insurance will help more young people to get into the businesses of the future.
Crucially, we need to drive forward the skills agenda. Many of the engineering businesses in my constituency—including Yamazaki Mazak and Worcester Bosch—are great supporters of apprenticeships. Many small and medium-sized enterprises are also beginning to take on apprentices. I am glad to see in the Budget the £85 million extension of support for SMEs to take on apprentices, and to see the £20 million increased funding for degree level apprenticeships. The Business, Innovation and Skills Committee, on which I am proud to serve, has challenged the Government to deliver on both quality and quantity for apprenticeships, and so far they have an excellent record on both.
I must mention some of the spending measures in the Budget that could directly benefit Worcester. The £20 million cathedral fund will be very welcome in many of our county towns, and the horse race betting levy extension will support Worcester race course. The cathedral and the race course are two vital landmarks in the city, and I am delighted that both could benefit from the Budget. The extra £140 million of flood funding is also extremely welcome for reasons that will be all too obvious to anyone who has watched television in recent months. It is also great news that we have seen progress on the question of VAT for air ambulances. That is a huge achievement following campaigning by many Members. I would now like to see progress on the question of VAT for hospices.
The Budget did not mention delivering fairer funding for schools, although the Chancellor did mention it in his autumn statement. We also had a statement on it last week, and a huge step forward has been taken on that issue for the first time in decades. This is a cross-party campaign in which many hon. Friends and hon. Members from across the House have taken part.
Christopher Pincher
My hon. Friend is right to say that the Campaign for Fairer Funding for Education is a great cause, and I congratulate him on championing it. Does he agree, however, that in so far as the fairer funding has been spread around the country, it seems to have overlooked Staffordshire?
Mr Walker
I do agree with my hon. Friend, whose intervention has given me the extra time I need to make the point that, for many years, that campaign was led by the former Member for Stafford, David Kidney, who spoke passionately about the issue. I have said to the Education Secretary and others that it would be unfortunate if Staffordshire were passed over in this regard, but £350 million represents a big step forward for the lowest-funded authorities and, by my calculations and those of f40—the Campaign for Fairer Funding in Education—Staffordshire is among those lowest-funded authorities and deserves help.
The Financial Secretary to the Treasury, my hon. Friend the Member for Bromsgrove (Sajid Javid) is on the Front Bench today, and he is a Worcestershire colleague. I am delighted that Worcestershire will be receiving £5 million to help schools that have been underfunded for a long time. The long-term economic plan to take our country forward must focus on skills and on preparing young people for the future. Fair funding for education is a vital part of that, and I am grateful for the enormous support that colleagues have given me during this campaign. Indeed, most of my colleagues sitting on these Benches at the moment have supported the campaign and spoken passionately about it. I am grateful that it is a cross-party campaign, and one that we have been able to take forward significantly this year, and in this Budget. This is a Budget for jobs and for the future, and it allows us to take a significant step forward in achieving fairness for our country.
Alex Cunningham (Stockton North) (Lab)
When the Chancellor rose to his feet yesterday, people across the country hoped he would have something to offer on the escalating cost of living and an economy that has seen the value of wages shrink. People in the north-east hoped he would offer help to do something about the highest unemployment levels in England. Nearly 1 million young people out of work, many for more than a year, hoped for some kind of job guarantee that would see them earning a living and learning along the way, and public sector workers hoped for a better deal and a fair reward for their work, but it was not to be. Instead, as we heard my right hon. Friend the Leader of the Opposition say, we have a Government who are able to give millionaires a £200,000 tax cut but cannot increase nurses’ pay by £250 a year. This is a Budget with inequality written all over it.
By failing to address the growing problems of inequality, higher prices, falling real wages and catastrophic housing shortages, the Chancellor has confirmed that any recovery that exists is being felt only by the privileged few. I have already alluded to the comments from Citizens Advice chief executive, Gillian Guy, who said:
“The Chancellor talked about making, doing and saving. This Budget needs to work for those who are making do and can’t save.”
She continued:
“We’re halfway through the austerity programme and many spending cuts have yet to bite. Families are feeling the cumulative impact of the stripping away of support and services from all sides.”
Citizens Advice tells us that
“3 in 5 people worry about the effect rising household bills will have on their finances over the next year…Half of UK adults— 27 million people—will have to cut their spending to cope with household costs. 1 in 4 people coming to Citizens Advice have some kind of debt problem”
and that 40% of them have dependent children.
That tells a tale not of a country where people are benefiting from the Government’s policies, but where inequalities are growing and families are suffering. Nowhere is that more the case than in the north-east, which, having contended with colossal cuts in the public sector and minimal investment, continues to have both the highest rate of unemployment and the lowest average weekly earnings in England.
Working people are already £1,600 worse off under the coalition Government than they were before the general election in May 2010, but that is exacerbated in the north-east by wages that are about £50 per week less than the UK average and almost £200 per week less than wages in London. Yet the Chancellor’s announcements yesterday do nothing to address this unfairness. While some will feel the marginal effect from the tweaks made to the personal tax allowance, thousands of hard-working and low-paid people across Teesside, striving to eke out a living for their families, will be even worse off as their limited incomes are stretched even further to meet rising energy, food and other bills. Many in my constituency simply earn too little to benefit from the Chancellor’s tax cuts, and can only dream of earning the £1,250 per month that can now be saved tax-free in ISAs, let alone being able to save this amount.
Let us not forget that while the Chancellor was making heedless efforts to encourage saving, Britain’s household borrowing is at a record high, equivalent to an average household debt of £54,000. So while the chairman of the Conservative party tediously patronised hard-working people by lauding minuscule cuts to the costs of beer and bingo, more families owe more money than ever before. This low-wage recovery means many have to deplete any savings they may have had, driving greater inequality and fuelling a growing demand for extra support—most worryingly, in the form of food banks.
Such naivety is just another demonstration of exactly how out of touch the Conservative-led coalition is with hard-working families. But too often the north-east is characterised precisely by the challenges that inequality poses, and not by the potential that exists in the region were it to be given the right opportunities to thrive and flourish. It is those opportunities that the Chancellor failed to deliver. Enhancing the mix of skills and knowledge within the regional economy, aligning them with those needed by businesses in the north-east, would be the first step to closing the skills gap.
While businesses such as Sembcorp on Teesside are managing to create jobs and recruit apprentices, many smaller firms struggle to share their expertise and skills owing to the lack of support they need to make a real impact. We have had some help from the regional growth fund money and an enterprise zone, and the Budget contains some welcome, albeit limited, positive news for energy-intensive industries on Teesside. But welcome as those things are, their value pales into insignificance in comparison with the support and investment for the north-east each year from 1997 to 2010. We really could have done with something in the Chancellor’s Budget to stimulate growth in the green economy on Teesside, an area that holds great potential both for growth and investment. Companies such as Air Products and INEOS are investing on Teesside, despite ongoing and tedious regulatory hurdles, but the Chancellor yesterday offered no incentive for others to follow suit. As a result, potential investors have been deterred and we have seen a large-scale investment slump from an all-time high of £7.2 billion in 2009 to £3 billion in 2012. This Budget comes back to one word: inequality.
Paul Burstow (Sutton and Cheam) (LD)
I wish to reflect on one or two significant changes that this Budget and the Government’s long-term strategy are delivering, and to look at how they impact on the businesses and the people in my constituency.
First, I welcome the further steps that have been taken on tax-free personal allowances. Some 39,000 people in my constituency will benefit from the £800 tax cut. In addition, my local council has frozen the council tax for the fifth consecutive year, which is good news for local families. None the less, we still need to go further. In due course, I hope we will be able to align the tax-free personal allowance with the national minimum wage, so that no one on the national minimum wage pays income tax.
Secondly, I want to welcome the pension changes that were announced yesterday. The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) has his fingerprints all over those proposals. Pensioner security has been his goal for a very long time. Linking the basic pension to rises in prices or earnings or 2.5% whichever is the higher has delivered an extra £650 to 14,879 pensioners in my constituency. That feature of our pension system should be made permanent. It would help to guarantee the foundation on which individual retirement savings are built. I also welcome what my hon. Friend said in response to me earlier on when he made his statement.
That leads me to the radical change to the way in which people take their pensions. The change is the most radical for nearly a century, giving people greater choice on how to access their defined contribution pension savings. The current arrangements are complicated and leave pensioners feeling short-changed. By lifting restrictions on individuals who have made the right choice to save can empower people to plan for their later life. The changes reflect the longevity revolution that is taking place in our country. As life spans increase and healthy life expectancy rises, we need our pension system to adapt to support people in their third age.
The quality of the guidance available to people when taking decisions will be critical. The fact that this guidance will be free and face to face is good news. I hope Ministers will take the opportunity to join up later life planning. The way in which long-term care is paid for in this country introduces a duty to provide information and advice, including financial advice. It must surely make sense to ensure that people are presented with a rounded picture of their later life needs. We all want to plan for our third age of active retirement, but impartial guidance should also help us to plan for our fourth age of frailty, when we sometimes need support and care. I welcome what my hon. Friend said on that, too.
It is great news that the UK is forecast to grow faster than any other G7 economy in the first half of this year. Sustainable growth will come from a more balanced economy. We want to prosper from what we make and from our ability to translate scientific discovery into jobs and growth for UK plc.
In my constituency, we already have a world leader in the life sciences—the Institute of Cancer Research. The institute discovers more new cancer drugs than any other academic centre in the world, as well as generating more invention income per capita than any other UK higher education institution. My council’s Successful Sutton growth plan, which has already attracted £319 million of inward investment and created many more new jobs, will form the heart of an extraordinary life science campus. What makes that plan so exciting is that the institute shares its Sutton home with the Royal Marsden, which is one of the world’s best cancer hospitals. That ability to translate discoveries from the lab bench to the bedside and to operate a close collaboration between clinicians and scientists provides a huge competitive advantage.
Mr Heath
I am interested to hear what my right hon. Friend says about the investment in his constituency. It is exactly what the Science and Technology Committee, on which I serve, is looking for in terms of the correlation between original research and market-ready bioscience and high-tech solutions, which we can use both in this country and abroad.
Paul Burstow
My hon. Friend is absolutely right. The two organisations in Sutton have an exceptional working relationship, which makes the site unique in the UK and up there with the best organisations in the world, such as MD Anderson in Houston and Sloan-Kettering in New York. My right hon. Friend the Business Secretary is aware of these emerging plans, and I know that my right hon. Friend the Chief Secretary to the Treasury was very impressed when he visited the Institute of Cancer Research in January. The potential from the site is huge. There is space for life science businesses to cluster; 10,000 direct jobs; a £350 million contribution to the economy; and increased research income. These are huge opportunities and I hope that the Business Secretary and his colleagues in the Department will ensure that his officials fully engage with them so that we can realise the full potential of the project.
Let me end my speech by making some comments about housing. What was announced in the Budget was welcome, but I think it missed an essential ingredient—a focus on the fastest-growing source of demand for housing, people over the age of 65. There is a chronic shortage of the right housing options for people in the second half of their lives. Too often, moves in later life come as a result of a crisis rather than an attempt to fulfil aspirations for a better quality of life. The Help to Buy scheme and the rules governing the community infrastructure levy need to be reviewed to help grow the market for later life housing. The impact on the housing supply chain could be profound, freeing family homes, creating jobs in renovation and helping people to make the most of their third age.
In conclusion, there is more to be done, but the Government have ensured that growth is back, employment is rising, unemployment is falling and inflation is under control. The Government are doing the right thing and providing a sound platform for this country to move forward and that is why I support the Budget.
Mr Steve Reed (Croydon North) (Lab)
People in Croydon North were looking to this Budget to help them with the cost of living crisis that has hit them so hard since this Government were elected. Wages are down £1,600 a year since 2010, long-term youth unemployment remains unacceptably high and people are struggling with the Government’s VAT hike and failure to restrain energy price rises. They looked to this Budget for change, but I regret they found precious little.
Instead, the Budget simply ignored the real problems facing people in Croydon North. With the average national income around £26,000, very few working households have a spare £15,000 a year to invest in ISAs. The issues that concern them are how to put food on the table, how to pay the heating bills and how to stay in employment, but on the things that really matter there was precious little help on offer from the Chancellor yesterday.
There is a desperate housing shortage across London. Croydon North has extremely high numbers of people living in substandard overcrowded private rented housing and what is needed is an urgent increase in the building of affordable and social housing. The proposals for Ebbsfleet, although welcome, are just a drop in the ocean compared with what is needed.
One of the most painful of all the challenges facing Croydon North is the scandal of long-term youth unemployment. Week after week in this Chamber I watch Tory Ministers’ complacency about that issue. In Croydon North, more than 1,000 young people have been unemployed for more than a year. That figure remains unacceptably high and the statistic masks the tragedy of individual young people growing up to be told that the society around them thinks that they have nothing to offer. It is a waste of their talent and of their ability, of their present and of their future. A national house building programme at scale could have helped to provide the jobs that those young people need, but that opportunity, alas, was missed yesterday.
One of the most welcome proposals for my party is the youth jobs guarantee. What a difference that would have made to those young people’s self-esteem and dignity and what a crying shame it is for every unemployed youngster in Croydon North that this Government will not introduce it.
Hard-working people are not obsessed with beer and bingo, in the way the Tories like to caricature them. Instead, they care about jobs, homes, education, health and how to pay their ever-rising household bills. The Tories can put out condescending adverts as much as they like, but they cannot hide from the fact that people are worse off, not better off, after four years of Tory rule.
Mr Tobias Ellwood (Bournemouth East) (Con)
It is the afternoon after the day before. The metaphoric bunting has gone, the media have left Westminster Green and the Chamber and, indeed, the Galleries have emptied—but that just might be because I am on my feet. This is the point at which enough time has elapsed to appreciate the full impact of the Red Book. If the newspaper headlines, radio interviews and a very weak Opposition response are anything to go by, this Budget is standing up to scrutiny and is already being recognised as a significant statement of intent, building on this Government’s long-term economic plan of reducing the deficit, creating more jobs and making people more financially secure.
The Chancellor began his speech by reminding us of the scale of the economic mess we inherited, caused by banks lending funds they did not have to people who could not afford it in ways they did not understand. It has taken a new Government completely to reform the regulatory system and to introduce the necessary changes to make Britain competitive again. Unlike the predictions from the Opposition, this was achieved without any double or triple-dip recessions in sight, as my hon. Friend the Member for Gloucester (Richard Graham) said.
The first primary indicator for the economy is employment, and a record number of people are now in work. The figures from my constituency point to the fact that the number of unemployed claimants for last month fell to 1,785, down 487 from a year ago. The shadow Chancellor tried to suggest that youth unemployment had somehow increased. He wants to be Chancellor. He wants to be the person in charge of the numbers, but he fails to mention that the figures include full-time students. I am pleased to say that the number of students at Bournemouth university, the Arts University Bournemouth and Bournemouth and Poole college have increased. They are included and he should know that.
Neil Carmichael
The same is true in my constituency. We have falling unemployment and we are looking for more people with engineering skills. Does my hon. Friend agree that the real success of this Government is the way in which they have stimulated the real economy?
Mr Ellwood
Absolutely. I concur with my hon. Friend, and that is one reason why more money has gone into apprenticeships as well.
My second point concerns GDP growth. A year ago, the OBR predicted growth for 2013 at just 0.6%. In fact, it came in at three times that level, and the forecast for next year has changed from 1.8% to 2.4%.
Thirdly, inflation now sits at 1.9%, well within the range set by the Bank of England. Fourthly, thanks to our low interest rates, the cost of borrowing by individuals, banks and the Government is low. But, of course, low interest rates are not so welcome to savers, hence this important announcement to end compulsory annuities, making it cheaper and simpler for pensioners to draw down their savings.
Christopher Pincher
My hon. Friend mentions that inflation is low. Is it not the case that wage inflation this year is likely to be higher than inflation, which means that finally we will see an end to the wages crunch?
Mr Ellwood
Again, my hon. Friend makes a valid point.
Finally, I come to the deficit, and how much the Government must borrow to balance the books. The OBR predicts that the deficit will continue to fall. We should remind the Opposition that when they took office in 1997, they inherited a sound economy. Up to 2002, the Labour Government made a surplus. Then the wheels came off, one by one. By 2004, the deficit was up to £33 billion, by 2008-09, it had increased to £69 billion, and in their final year of office, they had to borrow £156 billion to balance the books. Thankfully, a change in Government brought in a new economic strategy and our deficit has reduced to £108 billion this year, which will drop to £95 billion next year. If we stick to this economic plan, we will balance the books by 2018.
Of course, productivity, exports and savings figures are not what they should be, and the Budget addresses that. Time is limited and I cannot go into the details, but I welcome greater incentives.
Richard Graham
Does my hon. Friend agree that the remarks from the shadow Chancellor earlier, and indeed some of his colleagues, about the long-term unemployment situation, are important, but only as a proportion of the total unemployment rate in our constituencies, which has come down sharply in most cases since the last election? Those who are long-term unemployed were often not very well educated under the previous Government.
Mr Ellwood
Again, my hon. Friend makes a valid point, which is why we now see record numbers of people coming in to work.
I welcome greater incentives to save, with the ISA limit increase, the abolition of the 10p rate and the introduction of the new pensioner bond. The personal income tax allowance rise to £10,500 is also welcome, as are the larger and cheaper loans for companies seeking to export. Coming from Dorset, I of course welcome the freeze on cider duty, and I also welcome additional funds for apprenticeships, pothole and flood repairs, and regional theatres and airports.
Today’s Budget builds on the Government’s objective of securing the recovery and building a resilient economy. The job is not yet done, but the big question looming is whether we want to continue with a proven economic plan that is seeing Britain stand head and shoulders above any country in Europe, or risk returning to No. 10 the very team, the very people, who were responsible for the scale of the economic crisis in the first place.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
What is clear from the debate we have had today and the Budget statement we heard yesterday is that this Government are hopelessly out of touch. There was no mention from Government Members, either yesterday or today, of the central fact that after four years of this Government ordinary working people are £1,600 a year worse off.
The Chancellor said yesterday that his Budget was for doers, makers and savers. Well, it might help some doers, some makers and some savers, but one would not want to bet the house on it. That is because of the Government’s record. In 2010 he said that he would eliminate the deficit by 2015, but we now know that he does not plan to do that until 2018. The Government have borrowed £190 billion more than they originally planned to. Indeed, they borrowed more in three years than the previous Labour Government borrowed in 13 years.
In 2011 the Chancellor announced his Budget for growth, but we saw his growth forecasts revised down. In 2012 he said that he would tackle tax avoidance to raise billions of pounds, but the UK-Swiss tax deal raised only a fraction of the money the Government promised. The truth is that he is way out on his own forecasts of where he said we would be when he came to power. He has failed on the terms he set for himself, and ordinary people are paying the price.
The Chancellor would have us believe that his Budget will improve the lives of ordinary working people at some point in the not-too-distant future, but I am afraid that it is a future that is just out of reach—it is not now. There is nothing in the Budget that will help the ordinary person in the ordinary family in the here and now. In the here and now, wages are down for the ordinary working person, bills are up and the economy will not return to pre-crisis levels until 2017.
Sure, for a doer earning £150,000 or more, or a banker taking a big bonus, this is a Budget and this is a Government for them. The Chancellor has already given a huge tax cut to people earning over £150,000, and bankers’ bonuses are rising. People earning over £1 million have received a tax cut worth, on average, £100,000. But what about the rest of the doers? The average wage in this country is £26,500. There are no meaningful measures in the Budget to help them. What is gained by the increase in the personal allowance has already been more than wiped out by the cost of living crisis affecting millions of people across our country. The truth is that this Chancellor has given with one hand but taken away far more with the other. There is nothing in the Budget for the millions of hard-working doers up and down our country.
As for the makers, there was some welcome news in the Budget, but I am afraid that it is a case of far too little, far too late. On both energy and business investment, the Chancellor was simply putting right the mistakes that he made in his 2010 Budget, especially the cut in capital allowances, a fact that he conveniently forgot to mention yesterday. In 2010 he hit businesses that wanted to invest. It is good that he is starting to put that right, but it is very late in the day and a lot of damage has already been done to the economy.
On exports, again there were some welcome steps, but revised export forecasts show that the Chancellor is set to miss his 2020 target. In fact, the Budget suggests that he will not even get halfway. Again, his own record does not give us a great deal of hope. The Government’s export enterprise finance guarantee scheme helped just five firms before it folded, and the export refinancing facility was still not operational over a year after it was first announced. That is not a record to be proud of.
On science and research—this relates to the discoverers and inventors that the makers of this country rely on—once again we saw the Government’s characteristic approach: a little bit here and a little bit there, but nothing in the co-ordinated and planned way that this country’s science community is crying out for. There is no long-term science framework, as was delivered by the previous Labour Government, and as will be delivered again by the next Labour Government in 2015. Everybody knows that this country’s science, research and innovation base, which punches well above its weight on the global scale, needs a long-term plan for certainty and to build the critical mass from which great innovation occurs, but this Government have once again failed to deliver it.
As for savers, we will have to look at the detailed proposals, but the Budget itself shows that the forecast savings ratio has been revised down for every year from 2013 to 2018. So much for a Budget to encourage saving! This afternoon, the Institute for Fiscal Studies has told us that the changes are based on “highly uncertain assumptions” and could create people who lose out. What of the millions of people in this country, in the here and now, who cannot save because of the cost of living crisis? Saving will be a luxury for the hundreds of thousands of people relying on food banks to survive and the tens of thousands of people who are being pushed into debt by the bedroom tax.
In this debate we have heard many examples of the effects of the Government’s failure in powerful contributions from my right hon. Friend the Member for East Ham (Stephen Timms) and my hon. Friends the Members for Westminster North (Ms Buck), for Coventry North West (Mr Robinson), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for West Bromwich West (Mr Bailey), for Rutherglen and Hamilton West (Tom Greatrex), for Luton South (Gavin Shuker), for Feltham and Heston (Seema Malhotra), for Makerfield (Yvonne Fovargue), for Plymouth, Moor View (Alison Seabeck), for Stockton North (Alex Cunningham), and for Croydon North (Mr Reed). Every single Labour Member spoke of what the Government should have addressed in their Budget yesterday. This Budget is yet another missed opportunity to deal with the cost of living crisis.
Christopher Pincher
If the hon. Lady is concerned about the cost of living crisis, as we all should be, why did her party support an amendment to the Energy Bill in the other place that would have added £150 to energy bills? How would that help with the cost of living crisis?
Shabana Mahmood
The truth is that we have called for a freeze on energy bills, which are going up under this Government. Perhaps the Government might understand the cost of living crisis better if they had more women on their Front Bench. I notice that once again this afternoon there is not a single female Member on the Government Front Bench.
The cost of living crisis has meant that child care costs have spiralled by 30% since 2010. Energy bills are up by almost £300 since the election, with consumers having no way of knowing whether the bills are fair, owing to weak competition and poor regulation. Rent is using up more and more of people’s incomes, with rent arrears becoming the fastest growing debt, and food prices have risen by over 4% year on year, putting a huge squeeze on family finances. The Government know that this is not about choosing between bringing the deficit down and dealing with the very serious cost of living crisis. That is simply a false choice that they choose to hide behind, because this Budget could have addressed these things.
Labour Members have put forward a number of fully costed proposals that would deal with the cost of living crisis and get help to families here and now. On child care, we would use a levy on banks to provide 25 hours of free child care a week, worth £1,500, for working parents with three and four-year-olds. The Government’s proposals, which will not even kick in until after the election, will give most benefit to the highest earners, who tend to have the highest child care costs. On housing, we have committed to getting 200,000 homes a year built by 2020, whereas this Government have refused to take the action that is needed and are presiding over the lowest levels of house building in peacetime since the 1920s.
On energy, as I said to the hon. Member for Tamworth (Christopher Pincher), we would freeze energy bills until 2017, and, importantly, reform the energy market to stop consumers being ripped off. We would cut taxes for 24 million working people on middle and low incomes with a lower, 10p starting rate of income tax. We would put young people back to work with a job for the long-term young unemployed that they had to take, paid for by a tax on bankers bonuses. We would balance the books in a fairer way by reversing the £3 billion tax cut for people earning £150,000 a year, which this Government sought to prioritise ahead of any action to help hard-working families in our country.
Yesterday the Chancellor had an opportunity to help people who are struggling in the here and now, and he refused to take it. This Government’s so-called long-term economic plan has failed on its own terms, and people on middle and lower incomes are paying the price. People know that this is not about how the pound looks but how many they have in their pockets. Today they have fewer than they did in 2010, and in 2015 they will have fewer than they had in 2010. It is the same old story—you are worse off under the Tories.
The Financial Secretary to the Treasury (Sajid Javid)
It is always a pleasure to follow the hon. Member for Birmingham, Ladywood (Shabana Mahmood). This is the first time I have had an opportunity to speak in this House since learning of the sad death of the right hon. Tony Benn. With your permission, Madam Deputy Speaker, I would like to pay a short tribute to him. As a young boy growing up in Bristol, even though I did not necessarily agree with much of what he said, I admired him as a man of principle, passion and compassion. I extend my condolences to his family and friends.
I begin by thanking hon. Members from both sides of the Chamber for their contributions this afternoon. It has been good to hear some Labour Members actually offering opinions on the Budget’s measures, given their leader’s failure to do so yesterday. In 15 minutes at the Dispatch Box he more or less failed to acknowledge that the Budget even happened.
We should not be surprised. Not a single Labour Member seems to acknowledge the facts when they left office. They left the country with its biggest post-war recession, the largest budget deficit in the G20 and the largest banking bail-out in the world. Their policies destroyed the living standards of millions.
Shabana Mahmood
The Financial Secretary is talking about facts, so will he confirm one fact that his colleague the Chief Secretary to the Treasury failed to confirm yesterday, which is that working people are £1,600 a year worse off under this Government and that they will be worse off in 2015 than they were in 2010?
Sajid Javid
What I will confirm is that people in this country have been hurt because of the great recession that took place as a result of the Labour party’s policies. It was the biggest decline in our GDP in more than 100 years.
I am sure Labour Members will acknowledge that the best way to get our country back up on its feet and to improve the living standards of everyone in the UK is to have a growing economy that creates jobs. That is exactly what yesterday’s Budget continued to do. It is part of our long-term economic plan to give economic security to families across Britain and, through our increase to the personal allowance, to put more money back in the pockets of hard-working people.
Yesterday’s Budget sent a very clear message to all those businesses that are driving our economic recovery that, if they want to invest in new machinery, then, through our extension and expansion of the annual investment allowance, which will give 99% of businesses a 100% allowance, this Government will support them; if they want to manufacture but are concerned about the cost of energy, then, by capping the carbon price support rate, this Government will support them; if they want to export to emerging markets, then, with higher lending at lower interest rates, this Government will support them; and, crucially, if they want to employ, then, not just through our employment allowance, which comes into force next month, but through our extension of the apprenticeship grant for employers—which my hon. Friend the Member for Gloucester (Richard Graham) has referred to—this Government will support them. Those are measures that will help businesses to invest, manufacture, export and employ. As such, I hope that everyone in this Chamber will support them.
Mr Stewart Jackson
On the subject of fairness, which I am sure my hon. Friend is alluding to, is he as pleased as I am that it is the Conservative party in a coalition Government that is tackling tax avoidance by reforming stamp duty in relation to shell companies with residential property? The Labour party did nothing about that in 13 years and it also increased pensions by 75p and cut expenditure.
Sajid Javid
My hon. Friend is absolutely right. It is under this Conservative-led Government that the rich are paying a higher proportion of tax than in each year the previous Government were in office.
Yesterday’s Budget also provided targeted support for some of those industries that are critical for our economy. It showed that we are supporting our construction sector by offering £500,000 to small house-building firms; that we are supporting our oil and gas sector by introducing a new allowance for ultra-high pressure, high-temperature fields, a measure that will increase investment and jobs; and that we are supporting our creative economy by introducing a theatre tax relief and extending our film tax credit, a measure that will build on the astronomical success of films such as “Gravity”. All those measures will put money and trust back into the hands of businesses, and give them the power to invest, expand and employ.
Yesterday’s Budget was all about trust—trust in the imagination and hard work of the British people to turn our economy around, and trust in the fiscal prudence of the British people to take their hard-earned pensions when they want, and to invest and spend them how they want.
Sajid Javid
I am afraid that I do not have time.
Most importantly, the Budget was about trust in British businesses, as was highlighted by my hon. Friends the Members for Dudley South (Chris Kelly), for Poole (Mr Syms), for Stroud (Neil Carmichael) and for Norwich North (Chloe Smith).
Alex Cunningham
I am grateful to the Minister. The IFS has said today that the pension changes are based on “highly uncertain assumptions” that could lead to “market failure”. Would the Minister care to discuss that?
Sajid Javid
The pension changes will give people a choice that they have never had before: it is their pension, and it is their choice.
Our businesses are not, as the Opposition would have us believe, the enemy; they are the reason why our economy is growing faster than any other advanced economy. They are the reason why more than 1.6 million jobs have been created in the private sector during the past four years. Many Opposition Members have spoken today about the importance of bringing down unemployment, on which they are absolutely right to focus. They might have some good ideas about how to do it, so I thought that I would look at the facts. I can report that unemployment went up during Labour’s last term and has fallen under this Government in the constituency of every Opposition Member who has spoken today. For example, in the constituency of the hon. Member for Coventry North West (Mr Robinson), who is not in his place, unemployment went up 98% under Labour, and is down 29% under this Government. In the constituency of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), it went up 96% under Labour, and is 17% down under this Government. Which Opposition Member saw the largest increase in unemployment? The right hon. Member for Morley and Outwood (Ed Balls) saw a record increase of 184% in unemployment in his constituency during Labour’s last term, when he was in office, but it is down 21% under this Government. As expected, Opposition Members know how to create problems, but they have no idea how to solve them.
This Government trust businesses and want to help them, and we want to help the savers, the doers and the makers. This Budget does all those things, and I commend it to the House.
Ordered, That the debate be now adjourned.— (Mr Gyimah.)
Debate to be resumed Monday 24 March.
Madam Deputy Speaker (Dawn Primarolo)
If the shouting across the Chamber can stop—perhaps Ministers would like to go outside to do that—we can move on to the Adjournment.
Hinkley Point C (Infrastructure Projects)
Caroline Nokes (Romsey and Southampton North) (Con)
I want to thank Mr Speaker for granting this opportunity to debate the new Hinkley Point C nuclear power station, which, as I am sure hon. Members will have noticed, is somewhat remote from my Romsey and Southampton North constituency. In fact, it is more than 90 miles away. However, such a major infrastructure project, which will generate electricity and distribute it around the network, will have an impact on Romsey and Southampton North. Despite the distance, a group of residents in my constituency have valid concerns that Hinkley Point C has the potential to have a knock-on impact on the village of Nursling and, specifically, on a small group of residents who live near the local electricity substation.
Let me start by saying that I fully support the building of the new reactor at Hinkley Point and that I support an energy policy that is both affordable and diverse. The new power station is essential to keep the lights on. Along with developments in renewable energy, it will ensure that the UK’s energy needs are provided for. This is not, therefore, a speech that is anti-nuclear or anti-Hinkley Point. Neither is it a speech about energy policy.
This afternoon, I wish to give voice to my constituents’ concerns regarding the further development of an electricity substation that was built in the late 1960s and is now a potential part of National Grid’s planned infrastructure to deal with Hinkley Point when it comes online. Thus far, the planning process has denied my constituents that voice.
The Nursling substation is located in an extremely rural setting and occupies roughly a third of a 5-hectare field, the remainder of which has remained untouched since the substation was built. Outline planning permission was granted in 1963 and reserved matters were agreed in 1968. To call it a field is to do it an injustice. It is an important local amenity that enjoys a public right of way and is used by dog walkers and nature lovers from the local area. My constituents accurately call the field
“a piece of open countryside of rural character, which supports a diversity of wildlife”.
Although planning regulations might not regard it as such, that is, in my opinion, an exceptionally accurate description.
Close by sit a number of residential properties. There are two grade II listed buildings and two sites of special scientific interest, including the world-renowned River Test. There is no doubt that the field is a haven for wildlife. It includes a pond, which, along with the surrounding hedgerows, trees and grassland, provides a home for at least 12 species that are considered to be ‘protected’ under several pieces of UK and European legislation. There are slow worms, dormice, adders, water voles and the rare Cetti’s warbler, as well as other important birds and reptiles.
The field has been important in managing the recent floods, which have had a severe impact on my constituency. Recently, parts of it were under a metre of water. That is a subject of some importance, given that my constituency has been described by the Environment Agency as one of the most flood-prone areas of Hampshire. Therefore, it is perhaps not the best place to build a substation of this magnitude. Under the plans proposed by National Grid, the substation would approximately treble in size to accommodate two enormous quad boosters to deal with the electricity provided by Hinkley Point C.
My constituents maintain—and I share their concern—that, quite apart from the short-term nuisance that would be associated with the development, in the long term, the scheme has the potential to have a seriously negative impact on the surrounding area, the natural habitat and the amenity of the local residents. The footprint of the new substation will mean that the public right of way would be lost. This haven for wildlife would be concreted over to allow a dramatic increase in the size of the substation.
I share the concern of my constituents that, although the planning process underpinning the development of the actual power station at Hinkley Point has been absolutely transparent, the process for the development of what the Planning Act 2008 calls “associated developments” has not been quite so see-through in the case of Nursling.
It is apparent that the permission to develop the site, which is allowing National Grid to have an impact on the lives of local residents, remove a significant local amenity and destroy an important habitat, has been granted without those who have the most to lose having the right to be adequately consulted. That might come as a surprise to many who believe that we live in age of localism, in which those who will be most affected have the most say. However, because National Grid owns the field and has planning permissions dating back to its acquisition in the 1960s, the local planning authority has been obliged to issue a certificate of lawful permitted development because it has no choice. The residents can do nothing about it because they have no voice.
My constituents, who have produced an impressive dossier of information and data, assert that the development of the substation has avoided statutory and regulatory consent, and that the local planning authority has acted unlawfully in allowing it to go ahead. They have suggested that the decision should be judicially reviewed, on the basis that it should have been called in by the Secretary of State under the new powers granted to his office in the national planning policy framework. I will not comment on that assertion, but in an age of localism, I do not believe that a planning permission of the 1960s that was never extended over the full site should deny local residents an opportunity to register their objections, not least because the certificate of lawful permitted development means that National Grid is not obliged to do anything to ameliorate the negative impact that its development could have.
It is clear that Hinkley Point C is a development that will benefit the whole country, including my constituents. However, that of itself does not justify denying them a voice when it comes to related or secondary infrastructure projects that could have a negative impact on them.
The project was granted permission by the Secretary of State in March 2013, following a six-month consultation process that was headed up by the Planning Inspectorate and involved a panel of examining officers. There is nothing to suggest that there was anything untoward in the process by which the Secretary of State reached his decision and upon which he issued his consent order. Nor am I suggesting that the local planning authority has acted in anything other than a perfectly correct manner—I will leave others to decide whether that is the case. What is clear, however, is that for right or wrong, there has been not been an opportunity for the people of Nursling to be consulted about the impact of the additional infrastructure that is needed to distribute the power generated by Hinkley Point C, and that is unjustified.
The planning guidance associated with the 2008 Act, which was drafted specifically to deal with large infrastructure projects such Hinkley Point C, clearly lists electricity substations as the type of “associated development” for which planning permission may be granted. Indeed, the guidance states that it is
“designed to help those who intend to make an application for development consent under the Planning Act to determine how the provisions of the Planning Act in respect of associated development apply to their proposals.”
But there we have the nub of the problem—there is no application. That means that there is no opportunity for the local community to be consulted.
The field is subject to a certificate of lawful development granted in 1963, based on an outline planning permission, by an authority that no longer has planning powers. Because of that 1963 planning permission and the subsequent permitted development, the site is not part of the consultation on Hinkley Point C. In planning terms the expansion already exists, so it does not have to be part of the infrastructure consultation. It is a classic Catch-22 situation for my constituents—because there is nothing that can be done to prevent the substation from being built, there is no mechanism by which my constituents can express their view. How can it be right that a major infrastructure project affecting my constituents can go ahead without the need for National Grid to obtain any approvals for that part of it from any local or national Government Department and without any need to consult the residents affected? Does that example demonstrate that the Government need to review procedures for major infrastructure developments to ensure that the public have the right to be consulted in such cases?
I wish to raise several points with my hon. Friend the Minister this afternoon and ask him to consider some actions to prevent such a situation from happening again. First, should there be some sort of time limit for the completion of development for which full planning permission has been granted? In the field that I have mentioned, because the original substation was built in the 1960s and the entire field was included in the outline planning permission, the development is considered to have been started and concluded, but actually most of the site is untouched. A statute of limitation would mean that further development on the field could be subject to a fresh planning application.
Secondly, how is it that in a six-month planning consultation there was no possibility of this associated development being considered or consulted on? National Grid states that proposals of this type “normally” require permission from the Secretary of State, so why should planning permission dating back around 50 years allow this development to proceed without any of the usual requirements that something of this scale and magnitude would normally need? Indeed, I am not sure that the report by the panel of examining inspectors even considered that part of the development. National Grid simply did not include the development at Nursling in its application because it considered, in planning terms, that it already exists when it patently does not.
My constituents ask why the local planning authority was not obliged to screen the development, or to request a screening opinion from the Secretary of State to ascertain whether there was need for an environmental impact assessment. That is a relevant question because the land was deemed to be operational, despite the fact that it had never been used as such, which meant that an EIA was not required. That is a bizarre state of affairs. How can a rural field, full of wildlife, including protected species, within 200 yards of the protected site of special scientific interest of the River Test and untouched by development, be regarded in some way as “operational” land?
My constituents believe that the site should not have been granted a certificate of lawful permitted development, particularly given that in the borough local plan, that field had been designated as countryside for years. Needless to say, they are deeply concerned about potential risks to their health from this development, and complain that they have been give no information about how it will affect them. They feel unconsulted and ignored, denied at every turn the chance to have their voice heard. I thank Mr Speaker for this opportunity to air the concerns of my constituents, and the Minister for any response he may be able to give.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I congratulate my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on securing this debate, on raising an issue that her constituents are concerned about, and on describing her efforts to resolve the situation and get some clarity. This debate has raised important issues about the planning process and how it goes ahead with community engagement. I am pleased to have the chance to respond.
I thank my hon. Friend for bringing to my attention this complex planning case in her constituency, because it gives us the chance to consider some of the issues behind it. We are always interested to hear about local experiences of the planning system, and suggestions for how the system could be improved in the future. Her comments are now on the record, as are her suggestions for ways to ensure that situations that create the kinds of problems her constituents feel they are going through cannot occur. I hope that she appreciates that I cannot comment on specific cases because of the Secretary of State’s role in the planning process, but I am more than happy to speak in general terms about the issues she raises.
Let me make it clear that the planning system—which we have greatly improved since we took office—is designed to help secure the delivery of sustainable development. A number of different processes are in place to help to secure that outcome and ensure effective engagement with local people and their accountable councils in a proportionate way. Without commenting on the specific details of this case, as I understand it, the application for a lawful development certificate was with regard to the scope of permitted development, and not to the scope of any earlier planning permission. Therefore it might be helpful if I explain the mechanisms that I think are relevant and, in particular, the scope of statutory undertakers to undertake development without the need for planning permission—commonly referred to as permitted development. I shall also consider the purpose of lawful development certificates, and the process that is followed when an application for a certificate is made.
National permitted development rights allow certain building works and changes of use to be carried out without an application. I stress, however, that those rights are typically subject to a number of conditions and limitations that control impact and protect local amenities. For example, there could be limits on the height and size of buildings. In some cases, based on the scale of existing structures, there are a number of protected geographical areas, including areas of outstanding natural beauty, and national parks, where certain permitted development rights are not available, or size limits are reduced.
I should add that even if a planning application is not needed, other consents, such as operating licences, may be required under other regimes. These rights are set out in the Town and Country Planning (General Permitted Development) Order 1995, as amended. Members may be particularly interested in part 17 of schedule 2 to the order—I know it is something they will all want to be reading when they get back home tonight. Part 17 permits a range of types of development by bodies such as statutory undertakers, carrying out their functions under statutory powers. For example, under class G of part 17, certain development is permitted for the generation, transmission or supply of electricity. However, in common with most other parts of the permitted development order, there are a range of restrictions on these rights. For example, some of the rights do not apply in a national park, an area of outstanding national beauty or a site of special scientific interest. There are a number of restrictions in relation to the height and volume of the different types of structures that can be erected, and, in some cases, electricity undertakers must seek prior approval of the design and external appearance of certain proposed buildings. These rights provide important flexibilities for statutory undertakers to undertake development quickly and effectively, given the vital role they play in delivering national infrastructure.
It is important to note that although there is no legal requirement on all statutory undertakers to carry out a public consultation for development under permitted development rights, we have it made clear in our planning guidance, which is now available online in a usable and accessible way, that public consultation may be beneficial if development is expected to have a particularly significant impact. In such instances, consultation could be initiated by either the local planning authority or the statutory undertaker. Any consultation should allow adequate time to consider representations and, if necessary, amend proposals. In some cases, where it is not clear whether proposals can be considered permitted development, it is possible to apply for a lawful development certificate for a legally binding decision from the local planning authority. This is often used if there is any ambiguity over whether the proposal is within the scope of permitted development set out in the general permitted development order I mentioned a few moments ago.
Local planning authorities can seek information from the public on applications for lawful development certificates, if they feel that it would help them reach a decision on whether a development meets these legal requirements. I stress that the purpose of lawful development certificates is to confirm what is lawfully permitted already, having regard to existing extant planning permissions and the scope for permitted development. They cannot be used to secure planning permission for a new form of development. In considering whether the proposal was permitted development, the local planning authority would have had regard to the Town and Country Planning (Environmental Impact Assessment) Regulations 2011. Permitted development rights cannot be exercised without the local planning authority’s approval in a European site designated under the habitats or wild birds directive.
Clearly, where a proposal is not permitted development, a planning application, as we would expect, is required to be made for permission to carry out development. Such applications would be dealt with in the normal way by the local planning authority, including by providing the opportunity for interested parties to make their views heard. If planning permission is granted, development must take place in accordance with the permission, approved plans and any planning conditions attached to the permission. The development must be commenced within a specified time limit, or the planning permission will lapse.
If a developer subsequently seeks to modify or extend a development that has planning permission, they would need to speak to the local planning authority. Any proposed material change to the approved development, even a minor one, would require the submission of a planning application, which would of course again be subject to public consultation. If a developer constructs something different from the planning permission, including going beyond what is allowed by permitted development rights, the unauthorised development may be subject to enforcement action.
Finally, I would also like to turn briefly to the matter of Hinkley Point C in Somerset. Following extensive community engagement, the proposed nuclear power plant obtained development consent through the nationally significant infrastructure planning regime in March last year. I can confirm that the expansion of the Nursling substation did not form part of the development consent order for Hinkley Point C and it was not an associated development. There are changes in electricity generation in the south-west generally, including at Hinkley Point C, which may require changes at Nursling. As I understand it, however, the Hinkley Point C connector project, which is at pre-application stage, does not include proposals at Nursling substation.
I welcome the opportunity to contribute to a debate about these important matters. Let me again thank my hon. Friend for her contribution, and for the ideas that she has advanced. I hope that we have been able to make clear, in the national planning policy framework and in our new suite of planning guidance, that development —whatever it is, and whatever it ought to be—should receive the scrutiny that it deserves, and that the public locally want to see. However, we must also ensure that the planning process does not impose unnecessary burdens that could prevent development from proceeding. We believe that we have provided a framework that strikes the right balance between protecting public amenities and controlling local impact, and allowing the development that our country needs in order to prosper in the 21st century.
Question put and agreed to.