(9 years, 1 month ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
This Government have put Britain on the road to economic recovery. In 2010, our country was on the cliff edge, staring into an abyss of financial oblivion. The economy was stalling, unemployment was rising and the national debt was spiralling out of control. From day one, pulling the country back on to safer, more secure ground was our top priority.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Will the right hon. Gentleman give way?
Mr Pickles
In a few moments I will. It would be rather nice if I was able to start the speech, because I am sure that the hon. Gentleman would like something to critique.
Five years later, it is a different story: we have stepped back from the cliff edge, our growth rate is faster than that of anywhere in the G7, and our job creation is the envy of the developed world. It all confirms the old Yorkshire proverb, “Where there’s muck, there’s brass” and, boy, did Labour leave us a lot of muck. We have managed to start cleaning up the mess only because we stuck to our long-term economic plan. We stood our ground when ferocious economic headwinds blew in from the eurozone. We did not listen to those who said that the only solution was more borrowing and more spending beyond our means. Nobody now talks about plan B. We stood firm, and as a result today the deficit has been brought down by a half. Living standards are rising and a record number of people have found jobs. With our council tax freeze, there is more money in people’s pockets. The Budget is built on economic success. It will make our economy more resilient and protect taxpayers’ money. It will bring down the deficit and ensure that Britain pays its way in the world, so much so that the shadow Chancellor said that there is nothing in the Budget that Labour would vote against. Now the hon. Member for Blaydon (Mr Anderson) will tell me why the shadow Chancellor was wrong.
Mr David Anderson (Blaydon) (Lab)
I will tell the right hon. Gentleman what I want to tell him. He cited a Yorkshire phrase, but what we have seen over the past five years is closer to another Yorkshire phrase: “What’s thine’s mine, what’s mine’s my own.” That is how they operate in the right hon. Gentleman’s party, and they always have.
Mr Pickles
I kind of regret giving way to the hon. Gentleman. That sort of bellicose description is not worth considering. After all, Yorkshire is at the very heart of our economic growth, but naysayers like him—
Jim Fitzpatrick
I thank the Secretary of State for giving way. I apologise for interrupting him prematurely at the beginning of his speech. I was just very curious to know whether, in outlining the economic recovery, he was going to refer to the report from the Institute for Fiscal Studies, which was covered by yesterday’s Telegraph and today’s Guardian and says that the 300,000 immigrants have fuelled the recovery. What does that do to the UK Independence party’s fox and some of the Members on the Government Benches who have been raising immigration as a scare story?
Mr Pickles
Of course if we create more jobs in the UK than in the rest of the European Union combined, it is not surprising that we are doing well, and that people are leaving our great friends in France to come here to increase our prosperity. I am surprised that the hon. Gentleman, who has such a distinguished record of supporting the firefighters, did not wish to congratulate the Government on changing the rules to ensure that spouses of firefighters who die in action will be able to remarry, should they desire to do so, and not lose their pension.
Mike Gapes (Ilford South) (Lab/Co-op)
The Secretary of State has referred to halving the deficit. Will he remind us of the policies his party was advocating in 2010, which should have eliminated the deficit by now? Will he admit that this Government are a total failure in respect of their own aims?
Mr Pickles
Essentially, what the hon. Gentleman has said is that his party created an almighty mess and we have not been quick enough on the broom. He thinks we should have cut deeper, kicked harder and been tougher, but we are a compassionate coalition Government and we had to take those things into consideration. Had we gone any faster, there would have been social consequences. We have gone about the process without causing the problems that the hon. Gentleman would have been so difficult about.
Gregory Barker (Bexhill and Battle) (Con)
Does my right hon. Friend agree that these interventions show that Labour Members not only do not have a long economic plan—[Laughter.] I mean long-term economic plan. Not only do they not have a long-term economic plan, but they do not have a clue.
Mr Pickles
My right hon. Friend is prescient in all things, and his Freudian slip is absolutely right: Labour has a non-economic plan and it is not going to work. I do not think that they will get a chance to use it.
The Budget will also ensure that our economic recovery continues to benefit every area of the country. Some claim, as we have heard this morning, that London and the south-east are reaping all the rewards, but that is nonsense. Nowhere is generating jobs faster than the north-west, and Yorkshire is creating more jobs than the whole of France. Our French friends may have given us liberté, fraternité and égalité, but my old home county is providing creativity, industry and Yorkshire Tea.
Our economy is growing because this Government understand what makes the economy tick. We believe that all growth is local and that local people are best placed to make decisions about their area. That is especially true where we have improved planning and increased house building. Labour’s top-down housing targets trampled on the democratic wishes of local communities and built nothing but resentment. Majestic promises of eco-towns never got beyond the paper they were written on. We have taken a more practical approach: rather than relying on the long arm of Whitehall, we are trusting councils and communities to make their own decisions about planning and housing and to steer new developments towards the right location. The result is growing public support for new housing, which has almost doubled over the past four years. More than 700,000 new homes have been delivered since the beginning of 2010 and house building is now at its highest level since 2007. Last year, locally led planning systems gave permission for 253,000 homes across England.
There is always more to do. We want to increase significantly the number of homes we build, to sustain economic growth and support the aspirations of hard-working families. Instead of dictating change, we are helping local areas that want to build more homes and boost growth. That will include supporting the development of locally led garden towns in communities such as Bicester, Basingstoke and Northamptonshire. Together, they will deliver nearly 40,000 new homes.
We have appointed board members to oversee Ebbsfleet’s urban development corporation, and marketing will begin on the key Northfleet embankment site. The new garden city on the Thames estuary will provide up to 15,000 new homes, create opportunities for businesses and generate thousands of jobs. We have also given the green light to 20 housing zones across the country and will continue to work with eight other bids. Together with 20 planned zones in London, these will support the delivery of nearly 100,000 homes all on brownfield land. That is exactly where the public want to see new housing so that we can protect our precious green belt and our beautiful countryside.
Emily Thornberry (Islington South and Finsbury) (Lab)
On the subject of producing housing where the public need it, I am sure the Secretary of State knows that there are 19,000 families on the waiting list for housing in Islington, that the average price of a home in Islington is £630,000, and that 40% of my constituents live in social housing. Is he able to provide housing for Islington people? What is his plan for affordable housing in central London?
Mr Pickles
I have just explained that to the hon. Lady. Members on the Government Benches do not look down their noses at people who have white vans outside their houses. Those of us on this side of the House understand the importance of this. That is why it is we who will be working on brownfield sites so that the hon. Lady can occasionally visit the poor in her constituency.
Emily Thornberry
Rather than making cheap and rather silly points, which demeans the right hon. Gentleman, would he like to answer my question? Where is the Government help for building affordable housing in central London?
Mr Pickles
We are talking about something in the region of £400 million in London. The hon. Lady needs to understand that she is the queen of the cheap point. None of us will forget the tweet she sent out—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Just to help everybody, it should be the Chair who everybody speaks to and addresses.
Mr Pickles
Thank God you’re here, Mr Deputy Speaker. I was very happy to address the hon. Lady, but you were absolutely right to pull me up on that point of etiquette.
The plans are there; they are published. If the hon. Lady cannot be bothered to look at the plans and work with her local council, that is hardly our fault.
Mr Pickles
I think the hon. Lady should address her constituents directly rather than doing so through the Chair.
Our large sites programme has already unlocked the construction of more than 100,000 houses. We have now extended support for a site at Northstowe near Cambridge, which will benefit from 10,000 new homes on Government-owned land. We are supporting house building in the capital with a £97 million grant and a ring-fenced 50% share of local business rates to support the regeneration of Brent Cross and unlock 7,500 new homes. The London Land Commission will produce a database of public sector and brownfield sites, so that the Mayor can identify potential sites for new homes. These commitments to build more homes will be matched with support for hard-working people in the housing market, whether they are buying or renting.
Robert Neill (Bromley and Chislehurst) (Con)
Would my right hon. Friend care to note that the London Land Commission, which he has delivered with the current Mayor, reflects the need to assemble and deliver building on brownfield land in London, which the Labour Mayor of London was talking about years ago but never delivered while he or a Labour Government were in charge of London?
Mr Pickles
I do not really understand why that was. Labour’s solution to this brings to mind their solution of garden cities. They promised five but could not deliver five, so they promised 10 and never delivered 10. The London Land Commission is indeed a good thing.
The resale of shared ownership properties will be streamlined, and will make it easier for tenants in the private rented sector to sublet or share space. We will also extend our support for home ownership, which has already helped more than 200,000 households to buy or reserve a home. Buying our first home appeals to the very British sense of aspiration and self-reliance. It is a reward for hard work and an investment in the future—a place to settle down and to raise a family. A new Help to Buy ISA will give a much needed boost to people saving to get on the housing ladder. The Government will contribute an additional 25% of their savings up to a total of £3,000. In other words, if someone saves £12,000, the Government will give them an extra £3,000, making £15,000 in total.
We will also help those who want to rent an affordable home. By 2010, the net loss of affordable rented housing under Labour had reached the astonishing figure of 420,000 homes. By contrast, this Government will be the first since the 1980s—[Interruption.] Opposition Members should listen to this, because it is important. This Government will be the first since the 1980s to end their term with a larger stock of affordable housing, and I think that is a remarkable achievement. Our affordable housing programme will achieve the fastest rate of affordable house building for 20 years and will deliver more than 500,000 new affordable homes by 2020.
Mr Pickles
I just want to finish a couple of points, but then I will gladly give way to my old friend.
During the last five years, councils have built more homes than in the previous 13. Council house building is now at a 23-year high. We shall now start working with Keith House, Natalie Elphicke and the Local Government Association to implement the new housing finance institute, which will help build even more.
Sir Andrew Stunell
The Secretary of State and I are not always exactly on the same page, but we absolutely are on this. May I draw to his and the House’s attention the fact that we have indeed increased the number of social and affordable homes in this Parliament and that the 4 millionth was opened in my constituency just 18 months ago?
Mr Pickles
I am always happier when I am on the same page as my right hon. Friend, who was an immensely distinguished Minister in the Department for Communities and Local Government. He should take considerable credit for keeping us focused on affordable houses, and he should share in the triumph.
We are considering ways to deliver private rented accommodation for homeless families, so that councils can help those who are in most need, while reducing the reliance on expensive temporary and bed-and-breakfast accommodation.
This Government have put councils and communities back in charge of housing and planning. We have adopted the same approach to boosting economic growth. Local areas now have the breathing space and support they need to find their own economic solutions. We have ended the failed attempt by Labour to run the economy through regional quangos and have devolved powers and funding to enterprise zones and local enterprise partnerships. We have trusted local people, and they are now delivering jobs and growth in their communities.
Twenty-four enterprise zones across England have created a whopping 15,500 jobs, attracted more than 430 businesses, secured more than £2 billion of private sector investment and built world-class business facilities and transport links. These enterprise zones are gaining momentum as local centres of excellence—whether with biotechnology in Nottingham, advanced engineering in Lancashire, creative industries in Bristol or aerospace in Torquay.
We will now create two new enterprise zones at Plymouth and Blackpool, subject, of course, to business cases, and extend up to eight existing zones, so that more communities can benefit from these local engines for growth. We will also support the creation of a Croydon growth zone to create 4,000 homes and 10,000 jobs.
The message is clear: where cities grow their economies through local initiatives, we will support and reward them. Starting next month local authorities in Cambridgeshire and Greater Manchester will be able to retain 100% of any growth in business rates, so that they can support businesses and reap the benefits. Unlike what the Labour party is proposing, we are not raiding the budgets of local authorities to pay for this.
Robert Neill
May I particularly congratulate my right hon. Friend, because I honestly believe that this is one of the most significant steps towards devolution for local government that we have seen in 50 years? Will he confirm that the principle of 100% new business rate retention and the opportunity to pool health care funding will be available to other parts of the country if local authorities produce appropriate collaborative arrangements?
Mr Pickles
Absolutely. My hon. Friend was a distinguished Minister in my Department. Right from the very beginning, all this was envisaged under the Localism Act 2011. Rather than trying to move all local government at the same speed, we will of course devolve this power to those councils that are capable of managing larger budgets and delivering a deal. I envisage that within the next five years most local authorities will use such a system. For those that do not, the Prime Minister made it clear in a speech a couple of weeks ago that it will be our intention to get the retention up to 66%. I shall be disappointed if we cannot exceed that, but for most local authorities self-sufficiency and being able to raise their own finance locally and to spend Government money sensibly, and so on, is the future. I have great hopes for what is happening in Greater Manchester, and it shows that people of good will right across the political spectrum can work together.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Can the Secretary of State clarify whether all new business rates will be retained, or whether it will be all incremental business rates in addition to those currently predicted?
Mr Pickles
It is very straightforward; it is the same scheme that has existed since the retention scheme was introduced. It is the growth in the business rates. If a council goes out of its way to bring in new investment, it is only right that it should not be penalised for doing so, as it would have been under Labour. It should reap the benefits. I know that Opposition Members have difficulty with the idea that people should be rewarded for creating wealth and working for the common good, but that is how it is going to be. The Government are helping to expand local economies, and we also want to expand powers for local areas. As I have said, we have already devolved significant powers to the Greater Manchester combined authority.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
Will the Secretary of State give way?
Mr Pickles
In a moment. The right hon. Gentleman is a very distinguished Member, but he should wait for his turn like the rest of us.
That devolution of powers to Greater Manchester is the most historic development in civic leadership for a generation, and it will enable Manchester to support business growth, skills and better health and social care. A new devolution deal for West Yorkshire will give local councils greater responsibility for developing local skills, transport and employment opportunities. Across the country local areas are benefiting from new powers and resources to help their local economies flourish. I will now give way to the very distinguished right hon. Gentleman.
Mr Brown
The Secretary of State has not mentioned local authorities in the north-east of England—inadvertently, I am sure. He also failed to answer the question put to him by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), and he has failed to make the case for the balkanisation of the business rate. Mrs Thatcher’s legacy was to have the business rate raised on the ability to pay and distributed on the basis of need—I am sure that I can remember her saying that to the House. Why is he allowing it to be balkanised?
Mr Pickles
The right hon. Gentleman is a very distinguished Member of this House and no doubt has many things on his mind, so perhaps he has temporarily forgotten that we created a combined authority for Newcastle last year, which I understand is flourishing. Indeed, I anticipate that it will be the beneficiary of more devolution in the not-too-distant future. He talks about the balkanisation of the business rate, but it seems to me that if we are offering rewards to people who have worked hard in a local area, it would be grossly unfair to take money away from Newcastle just because it has done particularly well. He will also know that the Government are currently reviewing the business rate to ensure that fairness continues and that greater fairness is possible. I am sure that I speak on behalf of the whole Government when I say that we very much look forward to hearing the contribution that he will want to make on that.
The 2014 and 2015 growth deals are enabling 39 local enterprise partnerships to join up with councils and businesses to decide their own priorities. The funding can be used for investment in housing, roads, broadband or any other infrastructure. Some £12 billion will go towards local economies, and we have already agreed £7 billion of local projects. The result will be more new homes and infrastructure and greater support for local businesses to train young people, enhance skills and create jobs.
Britain has stepped back from the brink and started to recover from the deep failures of Labour’s great recession. Under our watch, the deficit has been cut and businesses are growing. Confidence is returning and house building is increasing. The number of first-time buyers is at a seven-year high and lenders are offering the most competitive range of mortgages ever. Local economies are growing and using their new powers to support businesses. That has happened under our watch only because this Government have provided the right economic leadership and because our long-term economic plan is working. The Budget will keep us on the road to economic recovery and prevent Britain from returning to the chaos of the past.
Hilary Benn (Leeds Central) (Lab)
May I apologise to you, Mr Deputy Speaker, and to the Secretary of State for the fact that I will not be able to be present for the close of the debate owing to a long-standing constituency commitment?
It is a pleasure to respond to the right hon. Gentleman—probably, I suspect, for the last time in this Parliament. If I may say so, his speech had more than a touch of a valedictory air about it. I join him in his congratulations tweeted yesterday to Lord Kerslake on his elevation to the other place. Lord Kerslake marked that occasion by telling the Local Government Chronicle that the current state of local government finance
“shouldn’t be confused with saying that therefore there’s another round of savings of equivalent size that can simply be taken out...I don’t believe that.”
More of that later.
I hope that someone is keeping score of the number of times we are going to have to hear the words “long-term economic plan” during the whole of this Budget debate. [Interruption.] Well, we did not hear it from the right hon. Member for Bexhill and Battle (Gregory Barker). By my reckoning, it took the Secretary of State 59 seconds to refer to it in his speech. I suspect that the repetition is a comfort blanket for Government Members who, given this wonderful success that we have heard about today, cannot understand why, so close to the general election, they are neck and neck in the opinion polls. The reason is that people know they are not better off under this Government and the Government have failed.
Let me say something about the attempt to rewrite economic history, because it is important to place this on the record. I have heard more than enough times from Government Members the charge that somehow the previous Labour Government brought about the global economic recession. It is not true: fact. Prior to the global economic crash, debt and borrowing were lower. Investment in public services was backed by the pledge of the then Leader of the Opposition, now the Prime Minister, to match Labour’s spending plans pound for pound. The action that we rightly took, against the advice of the then Opposition, kept people in their homes and kept them in their jobs, and not a single person lost a penny of their savings. I am still waiting, all these years after the event, for someone to explain to the House how the decisions taken by the previous Labour Government caused Lehman Brothers to collapse in New York. If anyone has an answer, I will readily give way. The truth is that the British economy was growing and unemployment was falling, and it does no credit to the Government to try to rewrite the past.
In 2010, the Chancellor of the Exchequer said:
“we are on track to have…a balanced structural current budget by the end of this Parliament.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]
As we know, that has not happened, and people have paid the price. They are worse off, they have seen their living standards squeezed, many of the services they rely on have been cut, and the poorest people and the poorest communities have been hardest hit. In the words of the Institute for Fiscal Studies, UK households have experienced
“the slowest recovery in incomes in modern history”.
That is quite some record. Despite the Chancellor’s excuses, we now know that it will take twice as long to balance the books as he said it would, and his plans for the next five years will involve extreme cuts to public spending. Do not take my word for it—listen to what Paul Johnson at the IFS says:
“The cuts of more than 5% implied in each of 2016-17 and 2017-18 are twice the size of any year’s cuts in this parliament.”
No wonder the Liberal Democrats tried to distance themselves from all this in their rather unsuccessful yellow Budget yesterday, but the whole nation knows that they are up to their necks in it because they have been supporting the Tories over the past five years.
It is not only on the deficit that the Government have failed. What about housing, which the Secretary of State mentioned? Having enough homes is of course absolutely fundamental to the economic growth that Members in all parts of the House want to see. If businesses are looking to expand, they need workers to fill those jobs and those workers need somewhere to live. Yet homes are being built at half the rate we need, house prices are rising out of reach, one in four young people in their 20s and early 30s are still living with their parents, and more and more people are having to rent privately, with all the insecurity that that can bring.
Back in 2010, at least two of the Ministers who are present today sat behind their new desks and made a lot of promises about what was going to happen to housing. Appearing before the Communities and Local Government Committee, the then Housing Minister was asked by the Chair:
“do we take it that success for this Government, when you are eventually judged on your record, will be building more homes per year than were being built prior to the recession, and that failure will be building less?”
The Housing Minister replied:
“Yes. Building more homes is the gold standard upon which we shall be judged.”
That was a pretty unequivocal answer.
We must make some allowance for the fact that the then Housing Minister—now the chairman of the Conservative party—does not always get things right, but what have the Government actually achieved? Fact: they have achieved a lower level of peacetime house building than any Government since the 1920s, and a failure to build, in any single year, more homes than the Labour Government built in every single year in which they were in office. The number of new homes for social rent is at its lowest level for 20 years. [Interruption.] Ministers can chunter as much as they like, but those are the facts.
Starts and completions of social homes have collapsed, which makes the Chief Secretary’s claim to the House last week all the more extraordinary. He said then:
“we have the highest annual rate of social house building than under the previous Government or for the past 20 years”.—[Official Report, 10 March 2015; Vol. 594, c. 145.]
If one of the first acts of a Government is to cut the affordable homes budget by 60%, they should not be entirely surprised if there is a collapse.
The Secretary of State talked about affordable homes. He made great play of the subject. I have the figures in front of me—the figures from his own Department, headed
“National trends in additional affordable housing… Trends in gross supply”.
In 2009-10, the supply of “All affordable housing” was 57,980. In 2013-14, the figure was 42,710. During the last full year for which figures are available, affordable house building under the present Government was at its lowest level for nine years. Those are the facts. Ministers have not even returned house building to its level before the global recession. They set a gold standard on which they said they wanted to be judged, and they have comprehensively failed to meet it.
One of the other consequences of the collapse in social house building is the rise in the housing benefit bill over the current Parliament. This year, it reached £24 billion. Half a million more people now rely on help from the Government to pay their rent than relied on it when the coalition came to power—many of them work, but do not earn enough money to pay their rent and other bills and look after their families—and 2.5 million more people live in the private rented sector. There are now 11 million people who rent privately, including a growing number of families with children, but nothing has been done to help generation rent.
Gavin Shuker (Luton South) (Lab/Co-op)
My right hon. Friend has made an excellent point. There are people who are working—working in many of the jobs that have been trumpeted by the Conservatives—but are not earning enough to put food on their tables and a roof over their heads. That is one reason why the Conservatives are failing so shockingly on issues such as housing benefit while claiming to be trying to lower the welfare bill.
Hilary Benn
I entirely agree. That is one of the consequences of the cost of living crisis, which is why we want a higher minimum wage.
A Labour Government will do something for generation rent. We will scrap the charging of tenants for letting agents’ fees, we will legislate for three-year tenancies—the Government say that they are in favour of three-year tenancies, but they will not actually make them happen—and we will put a ceiling on rent increases during the second and third years of those tenancies.
As for those who dream of owning their own homes, the Conservative manifesto could not have been clearer, stating:
“We want to create a property-owning democracy where everyone has the chance to own their own home.”
I give credit to the Secretary of State and the Government for the steps that they have taken to try to help first-time buyers, including Help to Buy and the measures in the Budget. We support those moves, especially the help for first-time buyers. However, let me say gently to the Secretary of State that Ministers must know—they must have been advised by their officials, and by plenty of other people—that if demand is increased without an increase in supply, all that will happen is that house prices will rise even further out of reach of people who dream of owning their own homes, the very people whom the House wants to help.
Mr Steve Reed (Croydon North) (Lab)
Does my right hon. Friend share my concern that under this Government thousands of homes in London have been sold to overseas investors who leave them empty, while throughout this city there is a growing housing crisis and people cannot find a home? How frustrating it is for them to see those homes kept empty when they have nowhere to live.
Hilary Benn
I agree that that is a particular feature of the housing market in London. The Government could do two things: the first is to say that homes in this country cannot be advertised for sale in other parts of the world before they are advertised in the United Kingdom, so that people in this country have an equal chance to buy them; and the second is to give local authorities greater power to disincentivise those who leave their homes empty, or who put in a stick of furniture and claim that they are occupied.
Mr Pickles
As far as I understand it, that is a new policy. Quite a lot of estate agents’ businesses are on the web these days, so how would that policy be possible? If adverts are on the web locally, they are on the web internationally. Will the right hon. Gentleman explain how it will operate?
Hilary Benn
There is indeed the web, but the right hon. Gentleman will be well aware, having studied the market, that some companies make a special effort to market properties elsewhere and do not make a similar effort to market them in this country. He surely does not agree with that. Everyone in Britain should have the same right and opportunity, and companies should not make a deliberate effort to try to sell to people from other countries before those in London have a chance to access such properties.
Robert Neill
Given that this is a completely new policy that, as far as we can see, is being made up as we go along—
Robert Neill
And it is being changed, so will the right hon. Gentleman tell us exactly what the policy is? What will the policy cost, how many bureaucrats will be needed to enforce it and what will be the impact on London as an international financial centre?
Hilary Benn
The hon. Gentleman should have listened to what I said. There is no cost. The principle is very simple, and I would have thought that it would command support right across the House. The advertising and marketing of properties should be done in the capital at the same time as it is done elsewhere, so that people in this country have the same opportunity to buy. I would have thought that he would support that policy.
Hilary Benn
No, I will not. I have answered the hon. Gentleman’s question.
There is another policy that the Government—actually, the Conservative party—have said that they will put in place if they are re-elected, which is to sell homes at 20% off. To go back to the chairman of the Conservative party, he was recently asked several times on Sky News how exactly that would be funded. He was not able to reply, but others have said that it will be done by exempting such sites, first, from the requirement to build social housing, and secondly, from the zero-carbon homes standard. I would tell the Secretary of State that the consequence will be that other people have less of a chance of getting a home they can afford, and people who move into houses built to a lower energy standard will end up paying higher bills than they otherwise would.
I have another question for Ministers. In talking about that plan, the Prime Minister said the homes
“can’t be bought by foreigners”.
I would be grateful if the Minister who responds clarified what exactly the Prime Minister meant.
Hilary Benn
Indeed. Suddenly silence falls on the Chamber.
Does that mean that EU citizens will be barred from buying one of these homes at 20% off? I think we should get an answer. The truth is that home ownership—[Interruption.] Well, I would give way if someone could give me an answer, but I do not suppose that I am going to get one. Home ownership is now at its lowest level for 30 years, and there are those with no home at all. Since 2010, homelessness is up by a quarter and rough sleeping is up 50%.
Hilary Benn
That really takes the biscuit—trying to allege that somehow the Government are counting properly. The fact is that before the last election, the Prime Minister said that it is
“a disgrace that in the fifth biggest economy in the world…we have people homeless, people sleeping on the streets”.
I agree with him. It is a disgrace and people should hold him to account for his shocking record.
We shall deal with the housing crisis only if we have a comprehensive plan. We have one—the most comprehensive in a generation—in the form of the Lyons review, which we will implement from day one of a Labour Government. We will make housing a national priority for capital investment. We will work with housing associations and councils to make it easier to build council houses, building on the changes we made to the housing revenue account.
We need more firms to be building. Thirty to 40 years ago, two thirds of the homes in this country were built by small and medium-sized builders; that proportion is now less than a third. Ask small builders what the problem is and they say, “I can’t get access to land and I can’t get access to finance.” We will introduce a help to build scheme, which will allow small and medium-sized builders to get lower-cost bank lending, supported by Treasury guarantees. We will encourage local authorities and others to make more innovative use of public sector land, investing in it as equity instead of selling it to the highest bidder, because that will also help us to deliver more affordable homes.
We will use Treasury guarantees and financial incentives to support the building of garden cities, and we will ensure that every council has a local plan. The Minister of State, the hon. Member for Great Yarmouth (Brandon Lewis), said that it is not necessary for every council to have a plan, but I think it is the responsibility of every local authority in England to have a local plan. Why would someone seek to be elected to an authority, or to be its leader, if they were not going to draw up a plan for the future of their community that included how they will meet the housing needs of the people who elected them?
The Minister of State, Department for Communities and Local Government (Brandon Lewis)
Has the right hon. Gentleman looked through the details of the builders finance fund, which deals with this issue? Why does he not trust local councils to represent local people with a local plan driven by local people, for local people, instead of the top-down approach that failed for 13 years?
Hilary Benn
It is very simple: the Minister and I have a different view. I think every local authority should have a local plan. To be perfectly honest, I cannot understand why a local authority would not want a local plan, given the structure of the national planning policy framework. I think that is an obligation. The Minister and I disagree. He is entitled to his view and I am entitled to mine.
Sir Andrew Stunell
Does the right hon. Gentleman acknowledge that when the NPPF was introduced, it was discovered that only about a quarter of local authorities actually had a statutory plan, despite the requirement to have one? What did the Labour Government do in 13 years to ensure that local authorities complied with what he now asserts to be vital and necessary?
Hilary Benn
With respect to the right hon. Gentleman, the coalition cannot have it both ways. The Minister says we took a top-down approach and told people what to do, but the right hon. Gentleman says the very opposite. The fact is—
Hilary Benn
The right hon. Gentleman should bear with me. The NPPF has changed things. I support its basic structure, but the changes I would make would be, first, to ensure that local authorities calculate their housing need on a similar basis and, secondly, to strengthen the brownfield policy, which, whether the right hon. Gentleman wants to argue about it or not, was weakened in the final version of the NPPF. That is the difference. I will give way to the right hon. Gentleman again, but why does he think that any local authority should not have a local plan? Does he agree with what I am arguing?
Sir Andrew Stunell
I am asking the right hon. Gentleman whether the criticism he is levelling at the coalition Government for failing to achieve what he sets out also applies to him and his Government, who failed to achieve it in 13 years. This Government believed—my right hon. Friend the Secretary of State and I certainly did—that it was right for local authorities to proceed at their own pace. We provided a carrot, not a stick.
Hilary Benn
No one is arguing about the pace, because the time it will take local authorities to come up with a local plan will differ. I think most of us agree—although clearly not everyone does—that every local authority ought to have a plan. If they do not, are they taking responsibility for their local community? On that, we have a different view.
We will give new powers to local authorities to create housing growth areas and new homes corporations, so that they can assemble land and work with builders—small and large—construction firms and self-builders to get more homes built.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does my right hon. Friend agree that the Mayor of London is undermining the social housing target by watering it down and making it an aspiration? In contrast, our policy is to set private developers a target on social housing and intermediate development of between 25% and 40%. Surely the Mayor of London is undermining any attempt to deal with the housing shortage, leading, frankly, to the social cleansing of people who cannot afford to buy houses that are worth hundreds of thousands of pounds.
Hilary Benn
My hon. Friend is absolutely right. As we have heard in this debate, the problem is most acute in London. The consequences of not building sufficient affordable homes are being felt in many ways, such as in the number of people who are privately renting, in higher rents that people cannot afford and in the housing benefit bill. Ultimately, it is a self-defeating approach.
One problem is that the process of house building has been far too passive for local authorities in many parts of the country. They identify the land and then hope that someone will come along with a proposal. The Lyons review is about creating the means—the tools—for local authorities. I bet Ministers wish that they had applied their minds and come up with a report like the Lyons review.
Brandon Lewis
Will the right hon. Gentleman at least acknowledge that as a result of trusting local people with local and neighbourhood plans, a record number of some 250,000 homes were given planning approval last year, which is way beyond what Labour was achieving? Why does he not just trust local people like we do?
Hilary Benn
As the hon. Gentleman is well aware, I am a strong supporter of neighbourhood planning, and I have said so from this Dispatch Box on many occasions. He will just have to wait until his Government manage to complete more homes in one year than we managed in any one of our 13 years before he stands up and says, “Our record is better than yours”, because his record is much worse than ours.
Brandon Lewis
I appreciate the right hon. Gentleman being so generous with his time. To be fair, Labour finished off with 85,000 homes in its last year—the lowest level since 1923—and we have delivered some 500,000 homes in the last few years, so he really should think again.
Hilary Benn
The hon. Gentleman is, of course, referring to the consequences of a global recession. [Hon. Members: “Ah!”] Well, it was a global recession. The Secretary of State made specific promises about what the Government were going to do and they have comprehensively failed.
The Lyons review says to communities, “In return for taking responsibility for building the homes that you need, we will give you the powers that you need when you identify sites.” I have listened to debates in this House in which Members, particularly Government Members, have said, “We don’t understand it. We’ve identified sites, but the developers come along and say, ‘I don’t fancy building there. It’s not viable for me. I’m going to put in a planning application for that greenfield site over there.’” Up and down the country, that is happening. It is a great frustration for local authorities and citizens, because if they identify sites, the deal in return has to be that that is where the development will take place. If we are just dependent on the big house builders, we will never get to the figures that we need and it will undermine the public consent that, we all agree, is fundamental to making progress on house building.
We must say to local authorities, “Here’s a range of tools that you can use to ensure that the kind of homes you want get built in the places you have identified and go to the people who need them.” That is why the one other thing that we will do is to give local authorities a planning power to say that in housing growth areas a percentage of the new homes that are built for sale should, in the first instance, be reserved for local first-time buyers. If we do that, we will turn quite a few nimbys into yimbys, because they will realise that their son or daughter, or their neighbour’s son or daughter, will have the chance to get one of those houses.
If we are to get to the target that we have set of 200,000 homes a year by 2020—I say to Ministers that surely their experience over the past four years has taught them that we will not do it by trying to put a bit more petrol into the old house building engine and cranking it up—there has to be a fundamental change in the way the house building market works.
Let me turn to economic evolution and growth. I acknowledge what the Secretary of State has done with deals for some cities—it would be churlish not to—but there is an unanswered question: if he and the Government are so committed to devolution, why has progress been so slow, patchy and piecemeal? Manchester aside, why have such limited powers been offered to a small number of large cities. Why, as the Local Government Chronicle put it yesterday, has DCLG
“almost seemed peripheral, a bystander to the devolution debate”?
Why has Lord Kerslake, now free from the responsibilities of office, said—again in the Local Government Chronicle—that
“it was only well into its fourth year that the government woke up to the benefits of devolution”?
I suspect there is plenty more where that came from. Why has the right hon. Gentleman stepped aside while the Chancellor and Deputy Prime Minister have had a row about whether powers can be devolved and whether we need a metro mayor? Perhaps he is not actually in charge of the policy.
What about the great counties of England? Until the Chancellor got up on Wednesday and finally adopted Labour’s policy on 100% retention of business rate income growth, which he said he would apply to Cambridge and Greater Manchester, the counties of England had frankly been ignored. The Secretary of State will be only too well aware of how angry his colleagues in the counties have been at his failure to stand up for them. It was noticeable last year that at the meeting of the County Councils Network—the great annual gathering of county councils—not a single DCLG Commons Minister could manage to clear their diaries to turn up to address what was mainly their party colleagues.
It is not a very long journey to Marlow—about an hour in the ministerial car—and I think the real reason is what happened to the Secretary of State the previous year at the 2013 conference. LocalGov.co.uk reported it thus:
“Mr Pickles received a hostile reception at the conference…During questions, the Tory leader of Leicestershire, CC Nick Rushton, asked the secretary of state: ‘Why are you always so rude to us?—
I am sure the Secretary of State remembers that well—
“It’s about time you spoke up for us in Government.’”
I sympathise with the Secretary of State because with friends like that who needs us on the Opposition Benches? It is the unfairness that makes people angry. The truth is that his Conservative colleagues in the counties know that they will get a better deal from a Labour Government than they have got from the Tory Government, and the same is true for the city regions.
Robert Neill
In what ways does the right hon. Gentleman intend to alter the operation of the formula grant to address sparsity in rural areas? How will he deal with adult social care, which it seems his Government want to nationalise and which is one of the principal cost pressures on top-tier authorities such as councils? How will that help the county council?
Hilary Benn
I will come on to that very point in just a moment if the hon. Gentleman is willing to be patient. He will have seen what Councillors Keith Wakefield and Peter Box have said about the new Leeds city region deal. Peter Box described it as “disappointing”, which I would call one of the kinder comments. What has really got up the noses of the existing combined authorities is that Labour’s offer of 100% retention of business rate income growth has been made to Manchester and Cambridge but not to the other existing combined authorities. Why is that?
For all the Government’s rhetoric about the “northern powerhouse”—now running a close second to “long-term economic plan”—the truth is that the most deprived parts of the country have faced the biggest cuts in local authority funding. Yes, Labour will change the formula because what the Government have done is unjustifiable. There is nothing empowering about taking a load away and then giving a little less back.
Gregory Barker
The right hon. Gentleman says that Labour will change the formula. Will he spend more money, in which case where will that money come from, and if he is not going to spend more money, who will lose out?
Hilary Benn
We have made it clear that we will have a fairer allocation from within using funding that is there at the moment. The right hon. Gentleman’s problem is that he cannot justify what the Government have done, and therefore applying more fairness so that everybody has to make a contribution is the right thing to do.
The National Audit Office and others have said there is not much evidence that the new homes bonus encourages house building that would not have taken place anyway. It is top-sliced from revenue support grant and tends in the main to be taken from the more deprived communities with the greatest needs and to go to communities that are less deprived with fewer needs. We will phase that out and redistribute the money back to local authorities on a fairer basis. Government is about making choices. We will devolve £30 billion of economic powers from existing money for county and city regions.
Iain Stewart (Milton Keynes South) (Con)
Will the right hon. Gentleman give way?
Hilary Benn
I have been very generous in giving way, but I am going to bring my remarks to a close.
We will devolve that money so that local authorities, coming together, have powers over skills, business and employment support, housing and bus regulation. We have talked about London today. If bus regulation, the ability to control routes and fares, is good enough for London—and it is—why is it not good enough for the whole of England? That is something we will do.
The truth is that the Secretary of State has devolved in one other respect: he has passed responsibility for taking difficult decisions down to the areas with the greatest needs. As we know, the 10 most deprived local authorities have seen their council spending reduced by 16 times more than the 10 least deprived. He has taken most from the communities that can least afford it.
I asked the right hon. Gentleman at the beginning of this week about the real impact on social care for elderly people—I said I would come to this—of the decisions he has made, or, to be more precise, as a result of his failure to stand up for local government and social care. He tried to pretend that the fact that there are 220,000 fewer elderly people now getting a hot meal a day, which is what research demonstrates, had nothing to do with him. He even tried to blame the councils, but it is everything to do with the way he has unfairly applied the cuts to local government. If, as he claims, it has been fair to all, north and south, how can he explain cuts to social care being deepest in the councils he has hit the hardest as the result of the decisions he has made? That is what NAO analysis confirms. Everyone knows the answer to that question is that he has taken most from those who have least. Worse is to come. The Office for Budget Responsibility says we will see
“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything over the past five years.”
Those cuts would be extreme and irresponsible, and have a big impact, including on social care. The Health Secretary takes all the stick for the problems in the NHS, but the Communities Secretary is fanning the flames.
We need a different approach. Local communities and local government are crying out for a different approach. Times are tough, but there is no justification for applying the cuts to local government in such a fundamentally unfair way. There is no justification for taking decisions that mean elderly people in one part of the country are less likely to get social care or a hot meal a day because they live in an authority that has been penalised by the right hon. Gentleman. There is no reason why local communities and the people they elect should not be given the powers and the tools to build homes for their children and their grandchildren. There is no reason at all why all the city and county regions of England—all of them—should not get the economic powers to help them to build their own strong local economies, invest in skills, build homes and create jobs for the future. All those things are possible, but it will take a change of Government to make them happen.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I remind Members that speeches should be up to, or around, 10 minutes long.
Gregory Barker (Bexhill and Battle) (Con)
On Wednesday, the Chancellor delivered a Budget for a country on the rise: cutting income tax, helping savers, starting to reduce our debt and investing across the UK to secure a better future for all our constituents. Despite the Opposition being as much in denial about the growth now surging through our country as they were about the chaos and damage they wreaked in the economy while they were in government, Wednesday’s Budget shows that the Conservatives’ long-term economic plan is working. With the deficit down, growth up, jobs up, living standards rising at last and debt starting to fall as a share of the economy, we are seeing the success that people have worked very hard for in the past five years. Against the odds and the Opposition, Britain is walking tall again, meaning more financial security and peace of mind for our families. In less than 50 days, we face a choice between sticking to the economic plan that is delivering for Britain or returning to the chaos of the past. With this Budget, I am certain that, when it comes to it, Britain will choose the future, not the past.
It is particularly extraordinary that despite the difficult decisions the Government have had to take on spending over the past four years and the cuts we have had to make to fix Labour’s deficit, there has been genuine investment in infrastructure up and down the country, including in my constituency. Ironically, there was a pledge for investment in transport infrastructure for 13 years under Labour, but we did not see a penny of it. Having made that promise during the 2001 election campaign, immediately the election was over it scrapped the Hastings bypass and then spent 10 years failing to come up with any workable alternative, but now, in a matter of months, the Hastings and Bexhill link road will open in my constituency, thanks entirely to investment in our local economy under this coalition Government that will create jobs, relieve traffic congestion and create the 21st-century infrastructure that an area such as east Sussex needs. This is just a small example of how the Government are investing for the future while making the tough financial choices to get us back on the path to recovery.
The Bexhill link road is not the only example. The A21 to the north of my constituency is one of the worst roads in Britain, with very little dual carriageway, despite being the main link from Hastings—one of the most deprived towns on the south coast—up to the M25. Now we are seeing a long-term plan for road improvements, and we can already see the dualling taking place at Tonbridge and Pembury. Furthermore, it is not just the roads being improved; we now have the very real prospect of Bexhill gaining high-speed rail, potentially delivering a service to St Pancras in 78 minutes, allowing us to take advantage of High Speed 1 to Ashford. This is extraordinary.
It is a tribute to the Government that theirs has not been a knee-jerk reaction to the shameless funnelling of funding and investment to just one part of the country that we saw for 13 years under Labour. We are actually seeing a balanced recovery. We have seen genuine equity and fairness in the allocation of national resources to where they are needed, where there is genuine demand and where they can be best put to use. We are seeing a truly national investment plan, as part of the long-term economic plan, and a truly national recovery.
One of the things I am proudest of the Government for is the long-overdue vision for a northern powerhouse. For that, we have to pay tribute to the Chancellor, because he owns it more than anyone else and has done more than anyone to articulate it and make it a reality. Before being elected in Sussex, I fought a seat in Greater Manchester, in Eccles, Salford. I am a southerner and I do not claim to know the north well, but it gave me a glimpse, back in 1997, of just how far the north was lagging behind the rest of the country and of the urgent need not just for new infrastructure but for a new vision. It is ironic that it had to wait for a new Conservative Government, after 13 years of Labour, to come up with a compelling vision for the 21st century, to create not another pool of subsidy—not unsustainable subsidy-fuelled growth—but a vision for a new global powerhouse and city in the north, with equal weight to London. That is the other encouraging thing about the overall economic picture emerging from the rubble of Labour’s great recession. We are seeing a more balanced Britain and a more balanced economy, and one with increased confidence, not just in London.
Sir Andrew Stunell
Given that my right hon. Friend has mentioned the word “balance”, I thought I would point out that it was not an exclusively Conservative move to ensure that the north of England received the priority it needed.
Gregory Barker
I readily accept that and should have mentioned it; I think it is a success of this Liberal Democrat-Conservative coalition. When the history of the coalition and this Parliament is written, it will acknowledge that two parties, the Liberal Democrats and the Conservatives—with slightly different outlooks and with a different set of policies—came together in the national interest to fix the disaster they inherited from the Labour party. For all the squabbles we occasionally read about in the press, which are blown out of all proportion, history will judge this to have been a period of extremely stable, successful, grown-up government between two parties that have made a real success of coalition. That is to the credit of everyone who has served in and supported this Government.
Another statistic that came out of the Budget is equally remarkable. On Treasury forecasts, we now expect the UK to emerge as the largest economy in Europe and to overtake the manufacturing powerhouse of Germany within 15 years. It is extraordinary that we not only have that ambition, but are on a trajectory to achieve it if we stick with our long-term economic plan. What underpins this is not any single item of fiscal policy, but the overall package that is helping to unlock, encourage and drive forward our single greatest asset—the new and emerging sense of aspiration, enterprise and creativity, a sense of can-do and ambition.
In businesses up and down the country, I have seen many young people prepared to take a risk and try something new, and people being prepared to start their own business. That is why, having come through this difficult economic period, we are seeing record numbers of business start-ups. It is this spirit of enterprise that will drive us forward in the 21st century—not some old-style, return-to-the-70s economic centralisation that is the “back to the future” dogma of the most left-wing Opposition we have seen for 30 years.
It is no surprise that the expert taken from the City by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) to help with rescuing the banks, who was hailed as being a sign of how in-touch Labour was with the markets and was seen as the architect of the banks’ rescue has actually resigned the Labour Whip. Lord Myners no longer sits on the Labour Benches in the House of Lords; he moved to the Cross Benches because of the left-wing surge on the Labour Front Bench. It would be a travesty and a danger if Labour were to be put back in control of the nation’s finances and our future. We need to stick to our long-term economic plan.
Another example of us investing for the future while taking difficult decisions on spending is that of science. Despite the cuts made, the Government have been able to ring-fence and support science because they recognise it as a core driver of economic growth. That is an indication of our confidence about Britain’s future in the world and a recognition of the UK’s ability to transform its leading science base into new products, services and markets. There is a genuine case for public sector and private sector collaboration there as in so many other sectors.
This plan is not ideological; it is pragmatic and based on the economic realities of the 21st century. I saw that in the energy sector and the creation of the world’s first green investment bank. I saw it give rise to a surge in investment in the world’s largest offshore wind programme. Across the board, we are seeing unprecedented investment in new sectors, new enterprise and new businesses. It leaves me thinking that although I am not standing for Parliament at the next election, if we can re-elect a Conservative Government, this country will indeed have a bright and prosperous future ahead of it.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
It is a pleasure to follow the right hon. Member for Bexhill and Battle (Gregory Barker), particularly since he referred to the most left-wing Opposition the country has seen for years. I am afraid that my remarks may not have as much credibility in that regard as he hopes. The one thing his speech has confirmed is that the subject under discussion is a Conservative pre-election Budget. When he made his tentative references to the northern powerhouse even the sun hid behind the moon, and we know that when it re-emerges the Liberal Democrats will take the credit for it and say that that is what they achieved for us, by working with others.
The Chancellor made it very clear—although he did not emphasise the point—that he is raising money in this year’s Budget and he is doing the same again next year. The substantial spending comes in 2018-19 and beyond—in the future. It is unreasonable to criticise a man for being lucky, but the Chancellor has enjoyed good fortune: inflation is falling; the oil price is coming down—no doubt the Liberal Democrats want to take credit for that as well, but such things are largely outside the control of individual Governments—and he is the beneficiary of the one-off receipts of the Northern Rock and Bradford & Bingley mortgages and the Lloyds bank share sell-off.
The Chancellor’s strategy, however, relies on achieving a further £25 billion-worth of public expenditure cuts. In fairness to the Secretary of State for Communities and Local Government, he has made the point that he cannot do the same thing over again in his Department. Three Departments have a measure of protection: Education, Health and International Development, leaving the burden to fall on the rest. Given the significance of what is proposed, we should have more detail before us. We know that at least £12 billion is to come out of the Department for Work and Pensions budget—and almost certainly out of the working-age component of the budget. Since much of this is demand-led, that seems to me to be quite a difficult thing to do, and the Chancellor should have set out to the House exactly how he intends to do it.
In his 2014 conference speech the Chancellor pledged a freeze in working-age benefits up to 2017, saving £3 billion. There is more to be found. He has indicated changes to jobseeker’s allowance and housing benefit and, in that context, the words “change” and “reform” must mean “less”. It is worth reflecting on what other proposals there might be as part of the £12 billion in working age benefit cuts. For example, there is the restriction of child benefit to the first two children. Of course the devil is in the detail. If that turns out to be unachievable, the alternative—if the Government are to have a chance to stick to their long-term plan—will be to look at indirect taxation or at the budgets of the three exempted Departments, such as Health.
The Conservatives have form on indirect taxation. Before the 1979 election they specifically denied they would double VAT. I remind the House, however, that they moved it from 8% to 15%—thus did they keep their pledge. Towards the end of John Major’s Government, the right hon. and learned Member for Rushcliffe (Mr Clarke) abolished zero-rating for fuel bills, bringing them permanently into the lower VAT band. Before the last general election the Conservatives had no plans to raise VAT, but managed to come up with some immediately after the election.
In earlier decades Conservative Chancellors would treat us to a Budget-day lecture on the money supply without mentioning quantitative easing or the over-optimistic use of leverage in the financial services sector, including the unregulated shadow banking sector. The Chancellor did not mention these things earlier, either. We, as a House—this ought not to be a party political point—need to focus on the work of the Governor of the Bank of England as regulator of the financial services sector and on the Governor’s work in foreseeing potential future shocks to the financial system.
The Chancellor did make one reference to this in the Budget speech, wedged between a section on inflation and a section on farmers’ tax returns. He confirmed the remits of the Monetary Policy Committee and the Financial Policy Committee. There is no new architecture between those committees and the House of Commons, but I think there should be. Accountability and transparency would be powerful weapons in ensuring that those serious issues are being taken seriously. The Chancellor made much of the employment figures, although the tightening of the labour market is not evenly spread throughout the United Kingdom. Unemployment is still an issue for the north-east of England.
I would like to have had some analysis from the Government Front Benchers about the mismatch between the employment figures and the productivity outcomes. The Office for Budget Responsibility described the UK’s “productivity puzzle” as the biggest risk to the United Kingdom’s economic health. The Chancellor is banking on increased tax revenues to help fulfil his Budget forecasts. Low productivity is holding down pay rises, and we are in the fifth year of public sector pay restraint. So there seems to be a contradiction, unless there is an as yet unspoken plan to increase indirect taxation. No doubt, if the Conservatives win and plough on with their long-term plan, they will think about that after the general election.
Unemployment remains an issue for the north-east of England. I welcome the Chancellor’s new-found interest in regional policy, but we in the north-east are not his northern powerhouse—that is Manchester and Leeds; we are his northern outhouse. It is not as if the Chancellor is averse to talking about far-away places in his Budget speeches—last year it was Mars; this year it was Agincourt, so perhaps next year it could be Tyne and Wear and Teesside.
I really would welcome the Chancellor’s taking an interest in the north-east of England. The tragedy is that the political parties do not really disagree about what we need to do. We need to grow, strengthen and deepen the private sector base of the region’s economy.
Mr Anderson
Does my right hon. Friend agree that one of the first things the Government did when they came in was to abolish the regional development agency, which had transformed the north-east after decades of deprivation and deindustrialisation? We were moving forward in a positive, united way, in partnership. It was a cynical, clinical move by the Government to get rid of the regional development agency, and it has been detrimental to the north-east.
Mr Brown
My hon. Friend is absolutely right. The abolition of the development agency was the largest single blow dealt to economic development in the north-east of England. The Government did it quickly. Governments make most of their mistakes in their first six months. Certainly, on economic development in the north-east of England, this Government did make most of their mistakes in their first six months.
As I said, the tragedy is that we do not disagree about what needs to be done. Resources need to be focused, and the work needs to be led in an authoritative, clear-sighted way. The coalition’s structural changes do not deliver for the north-east of England. Abolishing the RDA was a big step backwards, and the local enterprise partnership is not working for us—it has not even had a chief executive for the past year. If the North East local enterprise partnership had achieved anything, surely the Secretary of State would have told us about it, but he did not have anything to say about it. When I intervened to give him a chance to tell us about it, he still did not have anything to say, apart from generalisations. The money spent over the past five years on regional economic development in the north-east is less than it was for one year under the previous Labour Government’s arrangements.
There is a further regional danger: the unprotected budgets that are lined up for public expenditure cuts disproportionately hit local councils in the north-east. Separately, there have been at least two attempts to redistribute within the budgets that the Chancellor has protected. There are proposals to take £230 million out of the north-east’s health budget and redistribute the money to wealthier parts of the country.
The Chancellor said that we are all in it together. However, on the cost of living, job opportunities, local government budgets and a workable economic development strategy, it does not feel that way in the north-east of England.
Mr Tim Yeo (South Suffolk) (Con)
It is a particular pleasure to follow the right hon. Member for Newcastle upon Tyne East (Mr Brown). I remember a happy period at the end of the previous century when I debated with him—he was Minister of Agriculture, Fisheries and Food for three years—probably more often than I have ever debated with anyone.
The right hon. Member for Leeds Central (Hilary Benn), who led for the Opposition, expressed concern about the frequency with which the long-term economic plan and the northern powerhouse have been mentioned, but I am going to disappoint him. I must declare an interest; I want to draw attention to my entry in the Register of Members’ Financial Interests, which includes a new role at the university of Sheffield, which is a key part of the northern powerhouse, and whose research will contribute greatly to the implementation of the long-term economic plan. I also draw attention to my interests in the energy and transport industries.
This is definitely the last time I will speak in this House, as we are only 10 days away from Dissolution. I trust, therefore, that if I make a speech that is extraordinarily supportive of the Government, no one can suggest that it is an attempt to get a job. The Whip may record the voluptuous praise that I heap on the Chancellor and his colleagues, but it is entirely disinterested. It is really what I believe—just as if the Pope got up and said that he did not believe in God any more.
The plaudits that have been showered on the Chancellor are fully deserved. Under his stewardship, the economy has moved from disaster to triumph. The long-term economic plan and the northern powerhouse are essential for our future success, just as they were essential to put right the ghastly mess we inherited in 2010.
One reason I got interested in politics many years ago was that, in the 1970s, Britain was going through an appalling economic period, and as a business person travelling abroad I was embarrassed to say where I came from because we had become a laughing stock. That was all reversed in the 11 years of Margaret Thatcher’s Government, but she and her Chancellors would have given their right arms for economic statistics like ours: the fastest growth, record employment, record low inflation, and a recovery that is balanced throughout the regions. Those goals were only partially attained under Margaret Thatcher’s Government. All credit goes to this Government and this Chancellor for sticking with the long-term economic plan when it was under fire, not just from the Opposition but from a great many other critics.
In the 21st century, there are three essential pillars for any economy that wants to play in the premier league: first, a world-class infrastructure; secondly, top-class education; and thirdly, a tax and regulation system that is supportive of business. Judged by those three criteria, the Budget is a big move in the right direction. Transport in particular is an essential component of a modern economy, and Britain has been let down for many years by an out-of-date, 20th-century transport system, with congested roads, a failing railway and inadequate airports. I am a terrific supporter of High Speed 2, which is essential for the development of the north. If people cannot get somewhere, they will not invest there, jobs will not be created and the area will suffer a relative decline, so we need High Speed 2.
I am particularly delighted by the northern transport strategy. It is a wholly welcome development and another potentially transformational policy. It will be terrific to be able to get from Sheffield to Manchester in half an hour. One only needs to consider China to see how far our rail system has fallen behind what can be achieved. Last time I was there, just before Christmas, I took a train from Beijing to Wuhan. I was standing up, drinking coffee, talking on my mobile without holding on to any support. I rang a constituent and said, “The indicator says 320 km per hour”—that is 200 mph. We have made improvements, but even on High Speed 1, which does not go quite as fast as the Chinese trains, people need to hold on as they ricochet from side to side. The future is available to us, but we have got to grasp it quickly. I urge the Government to press on as fast as possible with the northern transport strategy.
I want to make a plea about airports. We urgently need an early decision on Heathrow. Without more connections to the great cities of the Asian economies, which will be a key part of the 21st century, we are going to struggle to develop the opportunities in those markets, which are essential to the success of our long-term economic plan.
I have strong—perhaps impeccable—green credentials, and I advocate investment in transport because a modern transport system can help to reduce emissions from the transport sector. Less congested roads and skies are better for the environment, in that they can lead to lower emissions. A continued modal shift from road to rail is also very beneficial, and we need that for freight as well as for passengers.
Equally important is a modern IT infrastructure. Let me now enter a plea on behalf of my constituents, who have shown such wisdom over the past seven elections by returning me to this House with comfortable majorities—I have confidence that they will elect my excellent successor, James Cartlidge, with an equally comfortable majority. My plea is that, before the end of the next Parliament, high-speed broadband should finally reach those parts of Suffolk that are still denied access to this absolutely essential business tool.
The second pillar is education. I strongly welcome the extra support for universities, which has been announced several times by the Chancellor in recent statements. The UK’s higher education system is a jewel in our crown. I welcome the support announced in the autumn statement for the Henry Royce institute, of which the university of Sheffield is a beneficiary, and the further support announced on Wednesday for the midlands. In particular, I welcome the energy research accelerator, which will contribute to another very important area in which Britain has, potentially, a big lead. Perhaps that programme could include Sheffield, which is almost in the midlands.
The direct link between that support for universities and science, under the leadership of my right hon. Friend the Member for Havant (Mr Willetts) who is about to catch your eye, Mr Deputy Speaker, and the performance of the economy is clear. The resurgence of manufacturing in the UK is now well under way. We were a world leader in manufacturing in the 19th century. We could be a world leader in advanced manufacturing, with high value-added jobs, in the 21st century, and we are already on our way to that.
Education is also about schools. I hope that the next Parliament will ensure that the schools budget is protected. Of course I understand why we protect the budgets for health, international development and defence, all of which are important candidates, but none of them is central to the economy in the way that education is, and the education budget is the one that, above all, needs our protection. I am a particular fan of free schools, and the Stour Valley community college in my constituency is an outstanding first-wave example of a free school. I was pleased to have the opportunity to fight for its establishment, and I urge the Government to press on with the expansion of those schools.
I shall touch briefly on the third pillar. A sympathetic corporation tax regime does exist in this country and must be maintained. Regulations have also been improved, but the big issue that we have not yet tackled is the planning system, which inhibits all kinds of development. To achieve economic prosperity, we need to streamline our planning system. I urge my hon. Friends in the next Government to make that a top priority. The often hidden but enormous cost of planning delays handicaps British business: it makes us less competitive, raises consumer prices and obstructs enterprise. That problem is particularly acute for infrastructure projects and we really must tackle that obstacle.
Finally, let me touch briefly on energy policy. The Budget announced support for tidal lagoons. I warmly welcome Britain’s leadership in researching and encouraging a variety of low-carbon technologies, including several marine energy technologies in which we are world leaders. I pay tribute to the work that is being done and I celebrate the huge expansion of investment in low-carbon electricity generation that has been achieved under this Government.
Gregory Barker
Very quickly, on the point about green issues, may I point out to my hon. Friend in case he missed it—I am sure that he did not—something that was buried at the back of the Budget, which was the announcement of marine-protected areas in Pitcairn? This is the largest ever marine conservation programme embarked on by any Government—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The right hon. Gentleman has made one speech; I do not need another one. Interventions must be short, and I am sure that Mr Yeo is coming to the end of his speech, as he has just gone past the 10 minute-mark.
Mr Yeo
I am indeed coming to the end of my speech. I am afraid that I had missed that detail in the Budget, so I am glad that my right hon. Friend mentioned it.
We must be mindful of the costs of low-carbon technologies. Some of them, such as solar, are within sight of needing no subsidy at all. Let us facilitate their expansion, and not obstruct it through the planning system.
Onshore wind potentially offers good value for money, and in some areas it is acceptable. I am concerned that we may turn our backs on a good value for money technology altogether. Onshore wind will always be cheaper than offshore wind. Although local concerns must always be respected, indeed paramount, we should not block its deployment in those places where it is acceptable. It is right to pilot lagoons, but we should persist in that process only if we are reasonably sure that the cost will fall, because the initial cost is undeniably extremely high.
While I am talking about energy, let me just mention nuclear power. I hope that, early in the next Parliament, we shall see a conclusion of the tortuous negotiation over Hinkley Point. I urge the Government to seek further ways of cutting the cost of new nuclear power stations—possibly by using their own fantastic and well deserved credit rating, which means that they are able to borrow more cheaply than any other borrower in the world—perhaps by funding the cost of construction, which is a great element of the ultimate cost of nuclear power, and then selling the power station on to a private operator for its operational lifetime. We should also consider how using tried and tested technology in nuclear power could help us to cut costs.
This was a magnificent Budget from an outstanding Chancellor and a terrific coalition Government. Anybody who believes that the quality of their lives and the prosperity of their families will be affected by the performance of the economy would be certifiably insane not to vote Conservative on 7 May. If the people of Britain do not recognise the merits of the long-term economic plan and the continuing need for it, then I will sadly conclude that the voters deserve their fate. I am confident that that will not happen, and that, seven weeks today, Britain will wake up to the joyous news that the country has returned a new Conservative Government by a landslide majority.
Mr Steve Reed (Croydon North) (Lab)
It is a pleasure to follow the hon. Member for South Suffolk (Mr Yeo), especially as he says it was his valedictory speech. Perhaps I should start by paying tribute to him and his many years of service to this House, the country and his constituents in South Suffolk.
I am afraid that people in Croydon North feel very let down by the Budget because it does next to nothing to tackle any of their problems. On Wednesday, the Chancellor told people that they have never had it so good, but that is not what my constituents have been telling me. On average, working people are £1,600 a year worse off under this Government, and that includes people right across Croydon.
The independent Institute for Fiscal Studies confirms that tax and benefit changes—the huge increase in VAT, for example, which the Government brought in straight after the election, despite promising that they would not do so—have left most families worse off than in 2010. However, the super-wealthy have not felt the effects of such changes, because the Tories took time out from piling the pain on hard-working families to give their millionaire friends a tax cut while heaping up the tax misery on everyone else.
In Croydon North, we are desperately worried about our local NHS services. Croydon gets around 10% less health service funding per head of population than the average, and there is no urgent plan to correct that. As a result, we have a desperate shortage of GPs, which means that people can wait up to three weeks to see a doctor if they fall ill. It has also led to unacceptable waiting times at the local A and E department at Croydon University hospital. Our A and E was one of the many emergency departments across the country that recently declared a major internal crisis, with ambulances queuing up outside and sick patients being left on trolleys in corridors for hours. Quite simply, that is unacceptable, but under this Government the problem has got worse and worse. The petition that I launched calling for investment to improve our local health services gathered thousands of signatures within days, but the Budget has done nothing to put the problems right. Tragically, the Tories’ plans for ever more extreme spending cuts in future mean that things will get even worse if the Tories get the chance to continue after the general election.
Croydon has the biggest shortage of school places in the country, and parents were looking to this Budget to help resolve that, but we heard nothing. The Government have spent more than £240 million opening free schools in areas that have no shortage of places, but tell children in Croydon North that there is not enough money to provide the permanent school places that they need. This is simply a case of the Tories putting ideology before common sense, and it is letting down children in my constituency who deserve better.
That has been a big increase in the number of working people in Croydon forced by low pay to claim benefits as a result of this Government’s economic policies. Labour knows that Britain succeeds only when working families succeed, and that is why I support Labour’s plans to increase the minimum wage to £8 an hour, to incentivise employers to pay the living wage, to ban unfair zero-hours contracts, and to offer 25 hours of free child care for three and four-year-olds to help parents get back to work and earn a living. That is what people in Croydon need: a better plan that puts them first, not the Tory dogma of poverty wages and a grinding downward spiral of welfare dependency.
Croydon was hit hard by the riots in 2011. We saw the Prime Minister and the Mayor of London walking around in the days afterwards and promising that they would help to keep people safer, but instead they have closed every single police station in Croydon North and cut the number of police on our streets compared with the number when they were elected. Now, with the Chancellor’s new plans for more severe cuts in the future, police numbers will be cut even harder, putting people at even greater risk from criminals. This is unacceptable. Serious forms of violence in Croydon are rising: violent assault is up, domestic violence is up and rape is up. Surely this is no time to be taking more police off our streets.
The only thing we can say about this Budget is that it makes the choice in May much clearer. That choice is between a Tory plan that has failed working people in Croydon North and Labour’s plan, which will put working families first and save our national health service.
Mr David Willetts (Havant) (Con)
It gives me great pleasure to contribute to this debate towards the very end of my time as the Member of Parliament for Havant. It is an opportunity for me to welcome the Budget and to salute the Government’s record in managing the economy, with 2.5% growth this year. It is that record that leads Government Members to feel compelled to describe our long-term economic plan, and I should like to turn to that part of the long-term economic plan that the shadow Secretary of State failed to acknowledge.
Emily Thornberry
I am so disappointed in the right hon. Gentleman for using such a empty phrase. Of all the Members who are leaving, we will regret his loss as he is an intelligent man and can explain himself much better than in these rather silly Tory buzz phrases.
Mr Willetts
I am touched by the hon. Lady’s intervention. Let me try to explain to her the part of the long-term economic plan that I think is relevant to the comments made by the shadow Secretary of State. When the original fiscal strategy was set out, which included the forecast for economic growth set out by the OBR, the Chancellor made it clear that if growth was not as great as forecast by the OBR, he would accept that tax revenues would regrettably be less and the fall in public spending might not be as great—because of what are called the automatic stabilisers. Those automatic stabilisers were explicitly part of the plan from the beginning and, because of them, we have ended up borrowing rather more than was forecast initially. In other words, what the Opposition criticise as somehow a failure of the plan was always part of the plan. There was always a recognition that it would need that flexibility and if they are really saying that we should have cut even more or raised taxes even more as a result of the economy performing less well in the early years than had been forecast by the OBR because of the crisis in the eurozone, that would have been bad for the economy. I am grateful for this opportunity to explain a key feature of the plan.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and I want to focus on two or three aspects of the Budget. I particularly welcome the imaginative package on savings. The Help to Buy ISA is an excellent innovation. I like the new flexibilities through which savers can put money into an ISA and temporarily withdraw it. It reminds me of the work that I did in the long days of opposition on what we called a lifetime savings account. It was intended to have the flexibility of people being able to put money in and take it out because it recognised the paradox that if people know that they can take their savings out of a savings instrument, they might be willing to save more in the first place. It is like the paradox that the device in the car that enables us to drive faster is the brake—when we know that we can brake we are willing to drive faster and when we know that we can take money out we might be willing to put more in.
Alongside those measures is the extra revenue generated by restricting the lifetime allowance for pension savings to £1 million. That presents the Opposition with a dilemma, because of course it was one of the measures that they announced would help fund their policy on higher education. I would be very interested to hear from the Opposition spokesman, the hon. Member for Liverpool, Wavertree (Luciana Berger), when she winds up what the Labour party envisages as the future of that much-derided commitment on university finance. Let us be clear what we are talking about. If Labour reduces fees to £6,000, that must be financed by an increase in the public expenditure going to universities. That is of no direct benefit to students, and the most that universities might hope for is some compensation for the loss of the income from fees. The beneficiaries are solely affluent graduates in middle age who will find themselves completing the process of paying loans back rather earlier.
When I heard the shadow Secretary of State speaking so passionately about housing and the importance of investing in it, I wondered what it said about Labour’s priorities. If Labour had £5 billion or £10 billion to spend, why on earth did it decide that its priority was affluent middle-aged graduates rather than, for example, a further package on housing? Many members of the shadow Cabinet must be frustrated by the bizarre priorities reflected in that judgment.
Gavin Shuker
The right hon. Gentleman makes his case clearly and in a statesmanlike manner, but I was in this House when he was taking through the legislation on fees. There were 91 speakers over those two days. I did not have the opportunity to speak but I was one of only about 10 Members of Parliament who knew what it was like to graduate with a large amount of student debt. I can tell him that it is paralysing and that it puts people off going to university.
Mr Willetts
Fortunately, the evidence is that the number of people applying for university is at a record level and that the proportion of people from disadvantaged backgrounds applying for university under the excellent stewardship of my successor, my right hon. Friend the Minister for Universities, Science and Cities, who I see on the Front Bench, has just hit another record. It looks as though those anxieties were misplaced, thank heavens.
Investment in higher education is part of a wider theme in the Budget. I welcome the proposals to invest in our young people in other ways. We have a fantastic record of falling youth unemployment and we have yet further investment in infrastructure. One of the best ways in which we can protect the interests of future generations is by leaving them with better kit and capital investment than we found.
As the debate was opened by the Secretary of State for Communities and Local Government, I must say that one of my long-standing Whitehall battles was a belief that the fragmented structure of local authority pension schemes in this country is an obstacle to long-term investment in infrastructure and in venture capital. It is frustrating that we have such a substantial amount of money going into funded pension schemes but, as they are in a multiplicity of small schemes, they cannot aggregate their investment and take the risks that would allow them to invest in substantial venture capital or long-term infrastructure. That is work in progress and more needs to be done.
While I am refighting old battles, let me also say how much I welcome the reference in the Budget Red Book to investment in rural broadband including via satellite. The current situation has never ceased to baffle me. I went to see the launch of a satellite as part of a European Space Agency project from Guiana that was going to deliver broadband services to areas of Africa that could not necessarily get conventional mobile phone coverage. It would be perfectly possible for us to guarantee 100% broadband cover for all parts of Great Britain if we were willing to use satellites to supplement conventional delivery of those services.
Let me end with praise for the Chancellor’s innovations in science and technology. We have established a happy tradition of bold new announcements on science and technology in Budgets and autumn statements. I welcome the ingenuity that has enabled a further £30 million to be invested in the excellent Crick institute.
I particularly welcome the new freedoms for research institutes, which is a response to a real competitive challenge. My hon. Friend the Member for South Suffolk (Mr Yeo) mentioned that. Let us be clear what form the competition takes. If a Nobel prize is awarded to a scientist in the UK, the Singaporeans will be absolutely clear that he or she will be able to earn a multiple of their current salary if they go to Singapore, and other competitors will make the same offer. An offer will be made to build a completely new facility of whatever sort they want. Their entire research team will be offered double their salary if they move lock, stock and barrel. It is very important that we are able to compete with such offers.
I think of our record of nuclear R and D. When major American universities recruit for expertise in nuclear R and D, they come calling in the UK. We need to be able to respond to that, and the current regime of salary and other constraints makes that harder. The new freedoms represent an excellent opportunity for us to compete globally in science.
Finally, I welcome the bold measures to support 5G communication. We had a great lead on mobile phone technologies. We lost it, I have to tell Opposition Members, because Labour’s auction of 3G licences was too successful. It extracted too much money from the industry. We have managed to catch up to some extent in 4G. We have a real opportunity to be world leaders in 5G. I support that, and it will in turn make other technological advances, such as the internet of things, possible.
All in all, this is a Budget for the future, a Budget for future generations, and it is a great pleasure for me, in one of my last speeches in this House, to be able to support it.
Gavin Shuker (Luton South) (Lab/Co-op)
I do not know whether the right hon. Member for Havant (Mr Willetts) is taking the opportunity of making a valedictory speech next Thursday.
Gavin Shuker
He is. Good. In that case, I need not offer any further praise other than that which many Government Members expressed when he sat down.
Mr Deputy Speaker, as you know, for the rest of us, life goes on. I am a diligent young man, as you know, so I have done my due diligence in tidying up my office and preparing for disillusionment. [Laugher.] Not so Freudian. I very much hope and expect to return after the enforced recess, which I am sure will give lots of people lots of pleasure.
However, in the process of clearing out my office I came across an incredibly rare document—something which I suspect many people do not have in their office any more—a copy of the 2010 Budget Red Book. That sound of shredding that you heard across Whitehall in recent years has been a series of Red Books being firmly thrown away. I raise the subject with reference to this Budget debate because that volume contains hugely interesting analysis.
In the Budget 2010 Red Book, on the page marked “Responsibility: deficit reduction”, the OBR set out what would happen
“without further action to tackle the deficit”.
It predicted what would happen if the Tory-Lib Dem austerity Budget was not implemented. It predicted that in five years’ time—in other words, in the financial year that we are just coming into—public sector net borrowing would remain at 4% of gross domestic product, having been at or above 5% in six consecutive years. It predicted that the structural deficit today would be at 2.8% of GDP, with the structural current deficit at 1.6%, and that debt would be rising, in the year that we are currently in, to 74.4% of GDP, with annual debt repayments of £67 billion.
We are forced to ask ourselves a question: at the end of this Parliament, after five years of Tories and Lib Dems in control, what happened next? Well, the stark analysis is that the Chancellor’s actions were worse than doing nothing. They talked down the economy for political ends and then threw what was at that point a growing economy into neutral for three years. Our public finances have performed worse than if the emergency Tory-Lib Dem Budget of 2010 had never happened.
This year’s Budget was meant to be the reward. It was meant to be the election-setting Budget. After four years of Tory pain, this was meant to be the sunny uplands—the debt starting to be paid off, the deficit ended. But the Government failed—by their own standards, not mine but those that they laid out in this book. It is the slowest recovery for 200 years. And it is to be followed after the election, should the Tories be back in power, with a slashing twice as big as that of any previous year, or any year in this Parliament.
So where are we? Public sector net borrowing is forecast to be 5%—not 4%—in 2014-15 and 4% next year. In fact, that is the same level forecast by the OBR if no action had been taken in that emergency Budget. The structural deficit is forecast to be 4.2%—not 2.8%—in 2014-15. The structural current budget deficit is running at 2.5%—not the 1.6% predicted. That is not just the same as inaction; it is worse. The public debt is still rising this year. It is claimed that it will drop in the next year, as we know, but we know that is because of some cleverly timed asset sales. We will see what happens next year. The public debt is forecast to hit 80.4% this year—five whole percentage points higher than it would have been if no action had been taken.
On all these measures—on borrowing, on the structural deficit, on the structural current deficit, on the debt—this Tory-Lib Dem austerity programme has undermined their own plans and our public finances. While we are talking about the debt, let us not forget that this Government have borrowed more than every previous Labour Administration put together. They have doubled the debt and it is still rising today. The Government have borrowed more in just over three years than the last Labour Government borrowed in 13 years, so we will take no lectures from them on the public debt and deficit.
Let me tackle this head-on. The Secretary of State for Communities and Local Government and the right hon. Member for Havant made a case for what should be done. The Secretary of State’s response was deeply telling when he was challenged on the fact that the Government had only halved the deficit rather than eradicated it, as was their original plan. He said that Labour Members were conflicted or confused—that our saying that the deficit should be lower was a sign that we were pushing for deeper, further and harder cuts. That is so telling because it points to the fact that to this Administration, everything is a nail and all they have is a hammer. But growth is a three-legged stool as are the public finances, despite the Government’s ideology. It is not just cuts but growth. There were three lost years before the inevitable rebound—admittedly aided by lower borrowing costs owing to a lack of demand in the eurozone and aided by a low oil price, which the Chancellor, by the way, has had nothing to do with despite the fact that he has tried to claim the credit for it—and the slowest recovery in 200 years.
Living standards matter. The Government failed, at the start of this Parliament, to see living standards as a central issue, with effects on tax receipts, job security and in-work benefits. The Chancellor spent an hour on Wednesday telling us that we have never had it so good. That does not reflect real people’s experiences of this economy, of their job security, of their children’s future, and the additional prices that they are paying for this Government’s failure.
There you have it, Mr Deputy Speaker. All this pain, all this hardship, paid for not on the backs of those with the broadest shoulders, who have received significant tax cuts, but on the backs of the poor. Families hammered; debt doubled and debt rising; growth years behind; and the deficit only halfway there, with deep pain to come. We are still borrowing £90 billion a year. For all the noise, for all the bluster and for all the words exchanged over the Dispatch Boxes in five Budget statements and five autumn statements, ordinary people are taking the pain. Unbelievably, this has been worse than doing nothing. That is the great Tory tragedy, not their triumph. Wednesday’s speech should be known for the hubris that it displayed.
Mr David Heath (Somerton and Frome) (LD)
I think that I can confidently predict that this will be the last Friday morning sitting to which I will contribute. It is a great pleasure to follow the hon. Member for Luton South (Gavin Shuker), who is proving the exception to the unhappy feeling that this is a special Budget debate, organised for elderly Members of Parliament not seeking re-election.
With any Budget, there is almost a parallel with the Hippocratic oath, which I swore so many years ago, or particularly the gloss to it, which is “primum non nocere”—“first, do no harm.” The first principle of any Budget is that it should not actually make things worse. By common consensus—I include the shadow Chancellor—this Budget certainly does no harm, but I would say that it actually does an awful lot of good. I shall refer to some of the things that leapt out of the pages of the statement that I believe to be substantial contributions to the benefit of the country.
On the continuing changes to the pension system, I think that history will suggest that my right hon. Friend the Minister for Pensions is one of the highest-achieving Ministers in this Government, because he has transformed public policy on pensions and done so to the good. I am particularly pleased to see the finance for mental health—so often the forgotten service—advocated by my right hon. Friend the Minister of State, Department of Health, and others, because that is a missing component of the national health service.
I am pleased to see the investment in science, so ably advocated by the right hon. Member for Havant (Mr Willetts), when he was in office, continuing through the election and, I hope, into the next Government. I share his pleasure at the announcement of additional investment in broadband, although I have to say that, in Witham Friary in Somerset, I will believe it when I see it, because we have been waiting a long time for broadband to arrive in any meaningful sense of the word. [Interruption.] And here is the Minister for Culture and the Digital Economy—the man himself—who will deliver that commitment in the next few days.
I am pleased from a parochial point of view to see the additional announcement of infrastructure development in the south-west. We have been a long time waiting for major projects to be done in the west country. Now they are being delivered after many, many years, and I feel that I can retire from the House at least having achieved something happening on the A303, as that has been one of my most devout intentions over the years. I am pleased to see an additional freeze on fuel duty. That has a huge effect on people in rural areas who depend on their cars not for pleasure but because cars are the only way to get about. I am pleased to see something I advocated when I was farming Minister: the averaging of farming profits over five years, which will make a big difference and help a lot of farmers who suffer from inevitable fluctuations in their fortunes year by year.
Of course I welcome the reduction in cider duty. I am rather a cliché, I am afraid: if no one else will speak up for cider drinkers and cider makers in my constituency, it has to be me. The 2% reduction in duty is, of course, enormously welcome, but I am still worried about the EU ruling on the exemption of small producers. I hope that the Treasury is taking that very seriously indeed and will find a way around it.
Of all the measures in the Budget, the increase in the tax threshold to £11,000 is beyond even what my colleagues and I promised at the last election. This is a serious change in tax policy, delivered over five years, reducing the rate of tax for 27 million of our fellow citizens and taking nearly 4 million people out of tax altogether. What a superb achievement from a coalition Government.
When I look at the overall background to the past five years, I believe that the measures taken have been crucial in taking us back from the brink of potential economic disaster, which we faced in 2010. I echo what the right hon. Member for Havant said: we have imposed rigour. Goodness, we have imposed rigour! Anyone who has sat through Cabinet Sub-Committees where they have been quizzed on their departmental spending knows the rigour that has been applied to Government spending, but it has been tempered by pragmatism constantly. When the eurozone collapsed, yes, the Chancellor recognised that this would affect the country’s revenue and trade and adapted the plans accordingly. Even last year’s autumn statement has been revised in this Budget to take account of reality. Even as late as yesterday, we discovered that orchestras now include brass bands, and as a former flugelhorn player for the Burnham-on-Sea and Highbridge town band, I am very happy about that.
The result of all this is a transformation in the country’s economic circumstances. It is all very well for people to say, “Well, it’s not quite as fast as we would have wished.” No, it is not, but I remember the 1980s when I had 17% unemployment in Frome. I now have a constituency that has statistically full employment: there is less than 1% unemployment in my constituency. That is a fantastic achievement, and it is down to the common sense and hard work of the Government in which I was privileged to play a small part.
I have three concerns, which I want to express briefly, as I have the opportunity to do so. First, I very much welcome what the Chief Secretary said yesterday about further measures to deal with tax avoidance. All Governments say that they will deal with tax avoidance. All Governments try to factor in substantial receipts from dealing with avoidance and evasion. Very few of them actually achieve the results that they say they will achieve, so I hope that the next Government will redouble even the substantial effort that has been made. One of the things that I want the Government to look at is the role of the accountancy profession and auditors. It beggar’s belief in my view that the big accountancy firms, which are paid an enormous amount of money to provide audited accounts, never seem to notice what the individuals and companies that they are auditing are doing with their money to prevent themselves from paying tax. So how about holding the accountants to account in the execution of their professional duties?
Secondly, our difficulty in achieving the £30 billion fiscal consolidation, which all parties in the House are signed up to, is that by protecting 50% of departmental spending the entire load is put on the remaining 50%. I know how difficult it was in the Department in which I was a Minister to achieve that. My concern here is that we are getting to the point where the resilience of Departments, particularly those that have to respond to emergencies and even those where the baseline may be fine, will be stretched beyond breaking point. That must be reflected in the measures that are taken.
The last point that I want to make is that we often talk about inequality. Some people suggest that inequality is increasing, whereas the statistics actually show that it is not. The inequality between rich and poor has marginally decreased. It has moved in the right direction, not fast enough in my view, but it has moved. There is a different inequality: the inequality between generations; the inequality between young people growing up now and finding their way into the job market and the elderly and the baby boomers who have had a pretty good time of it. That needs to be addressed by the next Government. That inequality is just as corrosive as that between the rich and the poor or anyone else. I hope that future Budgets will address that issue.
It has been a great privilege to have had the opportunity to speak in this debate and so many others over previous years, and I look forward to doing so for at least another four days yet.
Nick Smith (Blaenau Gwent) (Lab)
It is a pleasure to follow the right hon. Member for Somerton and Frome (Mr Heath), with whom I once spent an interesting and good week in a minibus in Nigeria, where we were supporting democracy with the Westminster Foundation for Democracy.
The Chancellor thinks we have never had it so good, but we in Blaenau Gwent know that is a long way from the truth. The only local growth we have seen under the Tories has been in food banks, payday loans and charity shops. More than 900,000 people used food banks last year nationwide. In my constituency, the payday loan company Wonga loaned more than £l million in my borough in just one year. Our valley towns have become run down, and there is no sign yet of that trend reversing. My constituents do not need empty claims that things are getting better; Blaenau Gwent needs jobs.
In recent years there have been some fantastic examples of good projects in the borough to boost our local economy, but the Chancellor does not deserve a shred of credit for the improvements that have occurred where the Tories have failed. Our housing association, Tai Calon, has invested over £100 million after negotiating with local banks to improve the quality of its social housing. Thousands of residents now have better kitchens and improved insulation.
The Welsh Labour Government, backed by European money, have improved, and continue to improve, our transport links. Road and rail are the arteries of any healthy economy. The Heads of the Valleys road improvements will allow commuters to get to the jobs they need and businesses to bring their jobs to Blaenau Gwent. That will also allow access to the Circuit of Wales project. Pleas to get the Conservative Government to back the project have so far fallen on deaf ears. In contrast, the Welsh Labour Government have provided important seedcorn money. Let us hope that the developers can now raise the £300 million needed to bring that venture to Blaenau Gwent.
Although we have not been cash-rich, with the Tories ensuring that their economic recovery passes us by, we are a borough that is rich in culture. Our brass bands and choirs have produced great talents that are still picking up national awards and acclaim to this day. The right hon. Member for Somerton and Frome nods—he knows the brass band world. It is obvious that, when we give our youngsters a culture of success, they produce time and again. The future of Blaenau Gwent is about not only celebrating our beautiful landscape—and we have plenty of that—but ensuring that those young talents are realised. The Circuit of Wales could bring thousands of jobs to the area, which is why we need to produce the work force to match.
The Labour-led council has improved the bricks and mortar of our schools, so now it is up to the professionals to deliver. That is why I am proud of Labour policies such as the jobs guarantee scheme, which will see 18 to 24-year-olds who have been out of a job for a year offered a paid role for six months. That is a massive deal for young people trying to get on to the employment ladder and will make a big difference in places such as Blaenau Gwent, where 16.2% of youngsters are still out of work. The Chancellor’s policies, however, have passed Blaenau Gwent by.
We were the birthplace of the NHS, but the Chancellor found no time to discuss the extreme budget cuts that could put it at risk. Tory tax changes such as the VAT rise have left families poorer than they were when the Government came to power. Working families are worse off while millionaires enjoy tax cuts. The coming election remains a choice between a Tory plan that is failing working families and Labour’s better plan, which will put working families first and save our NHS. We need a Labour Government for a better future.
Sir John Randall (Uxbridge and South Ruislip) (Con)
It is a pleasure to see you in the Chair, Mr Deputy Speaker, and to follow some of my right hon. and hon. Friends, particularly my right hon. Friend the Member for Somerton and Frome (Mr Heath). It is a shame to see another bearded gentleman and rugby fan leave the House—I hope that we will see some more bearded people returned in the next Parliament.
However, I hope that this will not be my final contribution in this House, because I have changed my mind and have an important announcement to make: I have now decided to try to speak in some debates next week. There are a couple of other contributions that I would like to make before taking that Metropolitan line train back to Uxbridge for one last time as an MP. In the words of Betjeman:
“Out into the outskirts’ edges
Where a few surviving hedges
Keep alive our lost Elysium—rural Middlesex again.”
Some of my earliest memories of politics revolve around Budgets and Budget day. I remember the bitter disappointment I felt as a young boy when children’s TV was taken off so that the Budget could be discussed by elderly gentlemen talking about things I did not understand. Well, nothing much changes, except that most of the people discussing the things that I do not really understand are now a lot younger than me. I probably understand the facts a little more, but not much.
I have a particularly long-lasting memory of one Budget. I remember that we were sitting in the family car on a wind-blown, rain-spattered promenade somewhere in north Wales for our spring holiday. My brother Philip was keeping very quiet because my father was getting more and more agitated as he heard the Budget announcements. It was from a Labour Government, of course, and I think they were introducing the selective employment tax. I do not know exactly what it was designed to do, but I should explain for those younger Members that basically it taxed businesses on the number of people they employed. It did not seem to me to be a particularly good way of getting people back into employment. However, I am sure they had a reason.
I think that the fundamental principle behind all these things was best expressed by Mr Micawber in Charles Dickens’s “David Copperfield”: “Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and sixpence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, ought and six, result misery.”
I am lucky enough to live in the London borough of Hillingdon. It has many delights, but one of the reasons we are so fortunate is that over the past four years we have been run by an excellent, Conservative-led local authority, under the guidance of Councillor Ray Puddifoot. It inherited a dire financial situation. Indeed, I remember that the headline on the Uxbridge Gazette simply read, “Bankrupt”, which the council effectively was. It has managed to turn the situation around, with prudent financial sense, because Ray Puddifoot is an accountant by background—despite what my right hon. Friend the Member for Somerton and Frome said, I think that good accountants have a lot to offer.
Our council tax has been frozen for the past seven years, or the past nine years for pensioners—obviously that interests me greatly. We have had 17 libraries refurbished, and they now have longer opening hours, three new youth centres and brand new sports facilities, including the first Olympic-sized swimming pool since the war, and all that while having to endure tough settlements from central Government, both Labour and Conservative. I mention that in order to demonstrate that once we balance the books we can really start to provide exactly what our residents, constituents and the people of this country want. That is why I applaud the efforts of my right hon. Friend the Chancellor.
Every Budget has a mass of detail hidden away in the Red Book, which is only provided after the statement. I was interested to read the details about the money that is to be provided to monitor seagulls and the disruption they cause in Bath. I do not know whether that will provide any job opportunities, but if it does I would like to get my application in, as I take a keen interest in gulls.
I also want to mention something that I think is very important—I think that it has been mentioned already—the designation of the Pitcairn marine reserve. It will be the world’s largest marine reserve, encompassing over 830,000 sq km, which is about three times the size of the UK. That is a tribute to many non-governmental organisations and right hon. and hon. Friends, particularly my hon. Friends the Members for Richmond Park (Zac Goldsmith), for Ruislip, Northwood and Pinner (Mr Hurd) and for Newbury (Richard Benyon) and my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), who have worked tirelessly to ensure that the various Departments got that together so that it could be included in the Red Book. I just hope that similar reserves for Ascension Island and the South Sandwich Islands will follow.
I noticed in the Red Book £7.4 million for getting wi-fi into public libraries. These things are not mentioned while we talk about the big issues. There is £3.5 million for protecting vulnerable people from nuisance calls. That will probably not be in time for the telephone canvassing for the coming election, but I hope that at some stage it will save people a lot of inconvenience.
On “talking buses”, I saw that:
“The government will continue to work with the Transport Systems Catapult and industry to develop a solution to ensure bus travel remains accessible to blind and deaf users.”
Disability issues on transport must be tackled. The hon. Member for Hayes and Harlington (John McDonnell) and I have been discussing step-free access into various of our stations and so forth in the London borough of Hillingdon, but also in London. The Government should look at that. If I were a curmudgeonly old soul, which thank goodness I am not, I would say that perhaps some of the money going into HS2 could have gone there instead. But I will not go down that line, as I think there is an opportunity to discuss it in Westminster Hall next week.
If we can get the economy into good shape—and we are going the right way—we can achieve so much as a country. There can be only one solution in the coming weeks, and that is to make sure that the current economic policy is continued. I do not think I need to spell out what is the best way to achieve that.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is an honour to follow the right hon. Member for Uxbridge and South Ruislip (Sir John Randall). I hope that he has many more contributions to make.
Yesterday we were treated to the spectacle of the Chief Secretary to the Treasury delivering an alternative Budget less than 24 hours after the actual Budget, and then promoting it with a yellow Budget box outside the Treasury. Given that in the next Parliament there are likely to be more MPs from the north-east than Liberal Democrats from the entire country, perhaps I should ask your permission, Mr Deputy Speaker, to present a north-east Budget, and then I could parade up and down Whitehall with a black and white Budget box in the colours of the Northumbrian tartan, and of Newcastle United. My hon. Friends from Sunderland and Middlesbrough might object, so it is just as well that I am not seriously considering such a stunt. The Labour party is a one-nation Opposition and will be a one-nation Government for everybody, not just for the few. A Labour Government will recognise how essential it is that all our regions prosper.
The north-east has many economic successes to shout about. We are the only region outside London that has a positive trade balance. Our export surplus is now £2.5 billion a year. One in three cars made in the UK comes out of Nissan in Sunderland, making the north-east the country’s No. 1 car producing region. The Tees valley is home to the UK’s largest integrated chemicals complex, which is the second largest in the European Union. Over 1,400 companies operate in the sector, exporting more than £12 billion of goods a year. More than 70% of the oil and gas platforms operating in the North sea were built in the north-east. We have world-class businesses and world-class institutions, such as our universities. Newcastle university’s achievements in mitochondrial DNA were debated only recently in this Chamber. Of course, we have fantastic people, not to mention our outstanding countryside and culture, and what is perhaps beyond price—a collective identity.
I grew up in Newcastle in the 1960s and ’70s. It was a city and a region that valued engineering and was proud of making and building things. We still lead the way in exports, and we are increasingly becoming a centre for hi-tech and digital businesses. There are few better places to live, work or innovate. However, I am not under any illusion as to the scale of the challenges we face. Unfortunately, we heard little this week in the Budget about how we might face those challenges. As the headline in our excellent local newspaper, The Journal, put it: “What about the North East, George?” The region has suffered a disproportionate level of cuts, and, as a result, has seen its economy shrink by 10% in recent years. The north-east has the highest rate of unemployment in the UK.
It is therefore not surprising that few of my constituents will recognise the unbridled good news that the Chancellor was trying to spin this week. Under this Government, everyday working people in my constituency and across the region are feeling the pain of the longest cost of living crisis in a century. They are £1,800 per year less well-off. Too many people are trapped in low-wage, insecure jobs where they work hard but do not see the benefits of that work. Inequality is continuing to rise. It is not good for the north-east or the country as a whole to have a deep and growing divide. A one-nation economy needs an innovative and dynamic north-east.
I know that the region is up for this challenge. In the decade between 1998 and 2008, with the support of the regional development agency, One North East, the region added 67,000 new jobs, many of these in the private sector, and saw growth of 10%. The new combined authority and the local enterprise partnership, working with their partners across the region, can play a crucial part in building a more innovative economy. Since the regional development agency was abolished by this Government, as my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) said earlier, the north-east, unlike London and the devolved nations, has had no collective voice to shout about its strengths and focus on its weaknesses. That is why I was pleased when the combined authority proposals came to fruition last year. However, the authority and local councils need real powers if they are to be able to make a difference.
This week the combined authority told us what some of those powers might be. They include a north-east investment fund made up of a range of current short-term funds combined into one and allocated by the authority as part of a long-term investment plan. We need more regional involvement in how European Union funding is invested. It is a scandal that this Government have allowed much needed EU funding to be lost. We also need the devolution of skills funding, the Work programme, and tourism and culture powers. We heard nothing about that in the Budget, and we heard very little about the future of our regional infrastructure. The combined authority has called for investment in transport networks and the creation of a new body to work on integrated transport delivery across the region for passengers and for freight.
The Chancellor seems to have managed to recognise the existence of the north in as much as he often talks of a northern powerhouse. It does not seem to spread as far as the north-east, but I guess it is a step forward that he can at least say the word “northern” on a regular basis. A real northern powerhouse that included the north-east would have had many of the powers announced in the Budget, or at least a movement in the right direction.
The Government talk about a northern powerhouse at the same time as imposing crippling council funding cuts. Councils are currently being forced to make almost impossible cuts, to a point at which some are questioning whether they can do anything other than deliver the services that they are obliged to deliver by law. Furthermore, the cuts imposed on the northern metropolitan councils have been much greater per head than those imposed on councils in other parts of the country which are, in many instances, represented by Tory Members.
My hon. Friends and I believe that, rather than being simply local delivery vehicles, councils and local and regional structures should have real power: power to bring about the positive changes that our constituents deserve, and power to bring about those changes in areas where they know the need exists. That is why we have said that we will pass an English devolution Act to reverse a century of centralisation. The Act will secure devolution to the people of England’s cities and county regions and transfer £30 billion of funding over five years, thus giving local communities more power to address local priorities and grow their local economies.
We will put economic power into the hands of those who know what their areas need, rather than leaving it in Whitehall. We will give city and county regions more power over their public transport networks, so they can set the right bus routes and operate fairer fares, as well as integrating their transport services to help working people and businesses to succeed in their areas. Unlike the present Government, we will support bus quality contracts.
Central to the future of the north-east is a fair funding system. Analysis by Oxford Economics found that the knock-on effect of the unfair distribution of cuts meant a further £1 billion loss of private sector investment in the region, a loss that we can ill afford. A Labour Government will end the bias against our poorest areas by ensuring that the funds that we have are distributed more fairly, and in a way that will allow councils to plan for the long term.
During the industrial revolution, the north-east powered the economy. When the Labour Government who will come to office in May are prioritising investment in the green industrial revolution and devolving powers to our councils and communities, the north-east will once again be able to power the nation’s economic success.
Mr David Ruffley (Bury St Edmunds) (Con)
A Conservative Chancellor is at the height of his powers. We see falling inflation, falling unemployment, rising living standards and healthy growth, built on the basis of deficit reduction and falling borrowing.
That was, of course, the legacy of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) in the 1990s. I was his special adviser then, and he is the man who is responsible for my being in this place. However, my right hon. Friend the current Chancellor can boast of an even greater achievement than that legacy. He has achieved stability, and put the country on the path from austerity to prosperity, from a much more difficult starting point: the great recession. On the basis of the Budget statement and the subsequent announcements that we have heard over the past few days, I believe that the current Chancellor will receive a better reward than our party received in 1997. He certainly deserves it.
I have spent about a dozen of my 18 years as a Member of Parliament focusing on Treasury matters, and during that time I have had my fair share of Financial Times headlines quoting what I have said. I was therefore grateful when, the day after this week’s Budget, the paper quoted me as praising it for being a “grown-up Budget”, which is my valedictory FT headline. I described the Budget in that way because it is demonstrably not a giveaway or a populist Budget, but a Budget that is in the national economic interest.
One of my few regrets during my time in this place is that too many of our constituents, and too many in the media, believe that we are all the same—that there is not much difference between the parties. That is probably partly due to their sense that a number of politicians and Governments are buffeted by global economic forces that they may not understand, much less control. I think that that is wrong. I have a slightly more idealistic view of nationally important economic statements such as Budgets: I believe that they should have a moral purpose.
I should add, in a spirit of bipartisanship, that the Budgets of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) were momentous events, although I did not agree with many of the measures that he introduced. I often thought that, in the noughties, he relied too much on the flow of very buoyant corporate tax receipts that were never going to last for ever, but on the back of which he spent too much. That is something that even Tony Blair has acknowledged, believing—and I think that, on this occasion, he was right—that in 2005 we could see the beginning of the opening up of a structural deficit in the Government’s public finances. Be that as it may, the fact remains that the former Labour Chancellor, ably assisted by the right hon. Member for Morley and Outwood (Ed Balls), undoubtedly had a moral vision of where the country was going.
Emily Thornberry
I was interested to hear the hon. Gentleman say that he believed that the previous Labour Government had spent too much. He talks of being on the record, and of making a valedictory address. Is he on the record as spelling out to the former Prime Minister, or the former Chancellor, any areas in which we were spending too much, and urging us to spend less? Were there, for instance, any hospitals that he did not want us to open?
Mr Ruffley
I will give one example: middle-class welfare-ism, as it is often described. We all supported the introduction of working tax credit, a repackaging of income support and family credit, as an in-work benefit for those on low pay—it was, and is, a good thing—but it extended much too far up the income scale, and a great deal of money was spent. Most economic analysts would not deny that that spending judgment opened up a structural deficit. The country was spending more than it could afford.
Let me return to my key point. I believe that valid differences, based on a moral outlook, are exhibited in this week’s Budget, and I will shortly explain why I think that it has purpose and deserves to be praised for that. Before I do so, however, let me say that during my time here, the economic Front Benchers of the Labour party have certainly made us think. I am reminded of what Edmund Burke said in his “Reflections on the Revolution in France”. It serves as a description not just of my experience, but of what I think the Chamber is and should be about. Burke said:
“He that wrestles with us strengthens our nerves and sharpens our skill. Our antagonist is our helper.”
I want to make two points in the context of the clash of ideas to which I have referred,. One relates to the part of the country that I represent, Bury St Edmunds in East Anglia. It was looked after in the Budget in two ways. First, there was the announcement that there would be a reform of business rates, and that a considered consultation on the matter would take place in the next 12 months. Why is that important? It is important because high-quality market towns such as Bury St Edmunds rely on the shops and small businesses in the town centre. They have been hit disproportionately by the great boom in internet shopping, and we have had to acknowledge that they have significant on-costs if their business is supported by bricks rather than by clicks. The basis of business rate taxation needs to be looked at to ensure the future of our market towns. The other point is that a car is a necessity, not a luxury, in areas such as Suffolk, so another freeze in fuel duty—the longest freeze for 20 years—is warmly welcomed in the East Anglia economy.
I want to make a general point about job creation. We know that 1,000 jobs are being created every day under the coalition Government, of which 80% are full time and 80% are in high-skill occupations. The apprenticeship scheme, which will be seen as one of the great achievements of this coalition Administration, needs to permeate more into rural economies and areas like as mine. The excellent West Suffolk college should do more to offer courses in skilled occupations, increasingly levering in the apprenticeship scheme, so that we can have more high-skill jobs in Bury St Edmunds, Stowmarket and surrounding areas. It seems to me and many others that while Cambridge has expanded north towards Ely and west towards Huntingdonshire, not enough of the Cambridge effect has spilled over eastwards down the A14 to west and mid Suffolk, as we wish it to do.
Ours is a relatively well-heeled and successful part of the country. Like you, Mr Deputy Speaker, I was born and raised a Lancastrian. I understand that the north of England has earned a lot of brass for this country during the past couple of centuries. I am delighted that the Chancellor of the Exchequer has understood that and has been so imaginative in putting together his northern powerhouse proposition. I welcome the pilot for Greater Manchester to keep 100% of additional business rate revenue, and the devolved powers that he will give to transport for northern areas and, in Manchester’s case, on NHS and training budgets. We want that proposal to be extended to Yorkshire and the north-east, as well as to those parts of the midlands that have not yet had the benefits that East Anglia and the south-east of England have received.
My second point relates to the big fiscal judgment in the Budget, which is that we will run an overall fiscal surplus. We will not just balance the current budget by 2018-19, but have capital and current surpluses by 2020. The surplus will not be as big as the £23 billion-plus projected at the time of the last autumn statement, but it will be several billion pounds—and such a relaxation of the fiscal position is good—because we as a nation absolutely must run a surplus. Why? Because as anyone will tell you in the City, where I shall return after May, there will one day be another recession. There just will be, no matter who is in power. Above all else, what we must learn from the past 10 years is that we need to be prepared. If we do not have a surplus for a rainy day, the cuts and the squeeze on living standards will be that much greater.
At the same time as wanting to run a surplus, the current Chancellor has very clearly set out two paths that are consistent with core, right-of-centre Conservative principles—the first is that individuals who work should be allowed to keep more of what they earn to spend as they choose, not as the state chooses; and the second is that individuals must be allowed to keep more of what they save to do with what they decide, not what the state decides. That is why two sets of measures in the Budget need to be praised. One set involves the new personal savings allowance, taking 17 million people out of tax on savings, which is a modest start to bolstering the savings culture. There is also the freedom for 5 million annuity policyholders to get out of their policies in a year’s time if they so choose, and the flexible ISA. The other set relates to income tax. The ambition of taking lower-paid people out of tax means that in two years’ time the personal allowance will be £11,000. That will help not just the low-paid; everybody, including those who pay income tax at the 20p and 40p rates, will receive a tax cut.
Finally, I would say that I leave the House wiser and more optimistic about this country’s economic health, its future and the ability of its citizens to compete in the world. I feel hugely grateful for, and very privileged to have had, the opportunity to represent the most beautiful constituency in the country, Bury St Edmunds. I still believe that this country is, and I hope it will remain, the greatest on earth.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to follow the hon. Member for Bury St Edmunds (Mr Ruffley). I have the highest regard for him, as I am sure he knows, and I am sorry that he is leaving the House. He has given another eloquent and solid performance on behalf of his Chancellor and his party, but he will not be surprised to learn that I do not agree with his analysis, as I shall outline in a few moments.
Many previous Budgets have taken until Sunday to unravel. It was to the credit of my right hon. Friend the Leader of the Opposition that he immediately spotted the big flaw in this Budget. In his response, he cited the Red Book to identify that the level of cuts impacting on the public sector over the next three years will be as deep as the cuts during the past five years. Many Labour colleagues have already referred to that in the debates during the past two days.
In fairness, there were some redeeming features, as there are in every Budget. The hon. Member for Bury St Edmunds mentioned that that was true of Budgets during Labour’s period in office. Those features include the initiatives on savings and the extra money for air ambulances, while bashing the banks is always popular—the hon. Gentleman is going back to the City, but that measure has gone down well with the public—and the measures on tax evasion and avoidance clearly have universal support.
There are, however, clear dividing lines between the parties. In east London, the big ticket issues are homes, training, the national health service and the public sector in general, including the issue of local authority budgets. I and my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), who I am happy to see in her place, have not only assisted the campaign to save the local health service for the past 18 months, but are still trying to get a clearer picture of the budget for primary care in our part of east London as well as that for east London generally. There is real concern about the funding of health centres right across the country, and it is not clear whether the Budget will offer them any help.
On adult training and further and higher education, Tower Hamlets college has had a 25% in its budget during the past four years, and only this week there has been an announcement about another 24% cut. That will have a huge impact on adult training in east London; it will certainly do so in my constituency. The announcement has united the Association of Colleges, the University and College Union and the National Union of Students, as well as students themselves. The fact that such an alliance should come together demonstrates that the issue is very serious, and it is not just restricted to east London. My hon. Friend the Member for Coventry South (Mr Cunningham) raised it in an oral question yesterday, showing that other parts of the country are affected as well.
That announcement will also mean further cuts to English as a second language training, which is hugely important to east London. Last year, it was found that English for speakers of other languages training has already been reduced by 40% over the past five years. Such training is critical to train and educate people with English language challenges so that they can compete in the jobs market.
On policing, there seems to be something of a conundrum. Although crime figures are down, my office has supplied me with Library statistics that show that there were 825 police officers in Tower Hamlets in 2010 and 627 this year, which is almost 200 fewer. Theft is up by 8%, burglary by 24%, sexual offences by 28% and robbery by 33%. Notwithstanding the Government’s success in making efficiency savings in police budgets, at some point the pendulum is going to swing too far. We are already perilously close to that point, and, sadly, it looks like police budgets are going to be squeezed even more.
There is consensus on and support for the benefits cap, but it throws up some anomalies. In east London, a number of families live in private sector rented accommodation and are charged market rents, and the benefits cap has a disproportionate effect on their ability to live. That is one example of how a universal benefit cap affects families in London. The shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), outlined Labour’s proposals for a fairer rents policy and guaranteed rents over three years, which will go down very well in east London and elsewhere.
A number of colleagues, certainly the Chancellor, made great play of the minimum wage. Government Members have said a lot about Opposition predictions of the number of jobs that would be lost through austerity. We say that if there had been no austerity, we could have made progress a lot sooner, because when the coalition came to power the economy had been growing for a couple of months. I remind the Conservative Members that when Labour introduced the national minimum wage, they were very confident that it would cost 1 million jobs. That prediction proved to be entirely wrong. For many of us, the living wage is even more important than the minimum wage.
In Canary Wharf in my constituency there are some fantastically well-paid bankers, but 105,000 people work there, many of whom are in low-paid jobs in cleaning, security and retail. I am happy to report that the majority of companies on the wharf have a living wage policy. I would like to see the Government promoting the living wage far more aggressively than they currently do. I am sure that a Labour Government would bring that aggressiveness to bear in due course.
Mr Andy Slaughter (Hammersmith) (Lab)
Does my hon. Friend agree that the Conservatives are taking exactly the same view of the living wage as they did of the minimum wage? That is shown by the comments of the Tory peer Lord Wolfson, who, as head of Next, paid himself £4.6 million last year, but says that the living wage is “irrelevant”. It is not irrelevant to my constituents.
Jim Fitzpatrick
My hon. Friend makes a very good point. Low wages are costing the Exchequer, and higher, fairer wages would benefit both the Exchequer and families. That argument is borne out by statistics that show that the living wage would help not only families but the economy.
I intervened earlier on the Secretary of State for Communities and Local Government to ask him about the Institute for Fiscal Studies report on migrant labour fuelling the economy, which was reported on in yesterday’s Independent and today’s Guardian. We do not seem to have acknowledged the contribution of migrants to the economy and how they have helped it over the past five years. The Government do not deserve all the credit. As I said, the Government wasted a number of years—a point that has been made a number of times by the Opposition.
Moving towards a conclusion—I am sure you will be pleased to hear that, Madam Deputy Speaker—I want to draw attention to some comments that have been made about the Budget. The chief executive of Citizens Advice, Gillian Guy, said:
“People on the lowest income and those without savings benefit least from this Budget…Positive moves on the personal allowance and fuel duty provide some small gains for stretched households, but there was nothing to address challenges around childcare, energy bills and private rents.”
All those challenges are addressed by Labour’s programme, which will go down well with Citizens Advice.
The Chancellor might not have been happy to hear what two commentators from the right had to say. I do not often quote right-wing commentators, but the editor of The Spectator, Fraser Nelson, said:
“I wonder: how ‘independent’ is the OBR? Osborne created it, defined its remit, appointed its chairman, banned it from assessing Labour ideas”.
If the Government, particularly the Conservative party, are so convinced and confident that Labour’s plans do not stack up and that our figures would create a black hole, why not use the independent Office for Budget Responsibility to do the analysis and reinforce their argument? I find it very strange and curious that that has not happened.
In yesterday’s Times, the subheading to an article by Tim Montgomerie—I do not agree with a lot of what he and Fraser Nelson say, but they are great writers and always a pleasure to read—stated, “The chancellor’s statement was the latest example of the Tories’ risk-averse strategy and leaves them without a vision”, while the headline stated, “We need more than this dull, simplistic budget”. If the Chancellor is being attacked from the right and from the left, I assume that some people will say, “He must be getting it right, because he’s in the middle,” but Labour Members do not agree.
The Chancellor also referred a number of times to fixing the roof while the sun shines. In Tower Hamlets when Labour was in power, most of our health centres and schools were rebuilt or refurbished; more than 20 Sure Start centres and the new Royal London hospital were opened; and thousands—possibly tens of thousands —of council and housing association properties were raised to the decency threshold for the first time in years and in some cases decades.
I do not accept that we crashed the car. As the shadow Secretary of State, my right hon. Friend the Member for Leeds Central, said earlier, Lehman Brothers did not crash in New York because of public sector spending in east London. Labour Members not only think but know there is a better way, and on 7 May I hope people will give us a chance to show exactly what it is.
Sir Tony Baldry (Banbury) (Con)
I appreciate that time is tight, so a full version of my speech will be on my website: www.tonybaldry.co.uk.
First, in my capacity as Second Church Estates Commissioner and soon-to-be chair of the Church Buildings Council, I should like sincerely to thank the Chancellor for the £40 million announced in the Budget towards the repair of church roofs. That is in addition to the £15 million made available for the church roof funds by the Chancellor a little while ago, and the £20 million made available for repairs to our cathedrals. In the past year the Chancellor has made available £75 million for the repair and restoration of cathedrals and churches, and that is in addition to the money he made available earlier in this Parliament to offset for churches and cathedrals the costs of VAT on repairs and renovation. I can think of no similar time when any Chancellor has made available such sums for church and cathedral repair.
For many people the presence of a church in their community is symbolic of the nation and a source of support and comfort even for those who are not regular churchgoers, and we are constantly seeing what more we can do to make church buildings more serviceable to the wider community so that they can be used as much as possible, and not simply for Sunday worship.
Not surprisingly, immediately after the Budget statement the Archbishop of Canterbury tweeted that
“money for church repairs will create local skilled jobs, improve community facilities and protect heritage, most welcome.”
As a trustee and member of the organising committee of Agincourt 600, may I also sincerely thank the Chancellor for the £1 million that he has allocated for the commemoration of our victory at Agincourt? There is a broader point here: the Chancellor and the Secretary of State for Culture, Media and Sport have been able to give support to cathedrals and churches, the 600th anniversary of Agincourt and other things only because the Government’s long-term economic plan is working and, as a consequence, the Chancellor has the necessary financial resources.
This year’s Budget has to be seen against the achievements of the past five years. The coalition Government inherited an unholy mess from the Labour Government of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). There was an enormous public deficit. Perhaps the most appropriate epitaph on the last Labour Government was the very telling note left by the last Labour Chief Secretary, which simply said, “Dear Chief Secretary, I’m afraid to tell you there’s no money left.”
Under the Chancellor, the mending of the public finances is well under way. The Treasury has stuck to its spending plans, and the gap between what the Government receive in tax and what they spend will be roughly half what it was when Labour left office in 2010. Moreover, falling inflation means that the deficit in 2015-16 is likely to be £2 billion to £3 billion lower even than the amount pencilled in by the OBR at the time of last year’s autumn statement.
Britain now has the fastest-growing economy in the world. Its growth last year was faster than that in any other major industrial economy, including the United States. More than half a million new jobs were created last year alone and unemployment is half what it is in the eurozone. The other day, I asked my right hon. Friend the Secretary of State for Work and Pensions:
“In the past five years, how many people have moved from benefits into work?”
He replied:
“The record now for people moving from benefits into work is remarkable. Some 600,000 have moved back into work. Peak to peak, the figure is over 800,000, and we have many, many more people back in employment. There have never been as many people in work and that number is still growing, with some 700,000 vacancies in the jobcentres every week.”—[Official Report, 9 March 2015; Vol. 594, c. 20.]
We now have the lowest claimant count since 1975.
That significant and sustained fall in unemployment is reflected in my constituency. When I was first elected more than 30 years ago, the unemployment rate in and around Banbury was over 14%. Today, the unemployment rate in my constituency is significantly lower than 1%. The Banbury jobcentre, according to Jobcentre Plus, has just 17 claimants who have claimed continuously for two years and can be considered to be long-term unemployed. The most recent data show that 97.8% of claimants in the Banbury constituency leave jobseeker’s allowance within 12 months of their claim.
It is worth recalling that after my right hon. Friend the Chancellor’s first Budget in 2010, the temporary leader of the Labour party, who is now the deputy leader of the Labour party, claimed that the 2010 Budget would “throw” thousands of people out of work. Labour was wrong about that, as it was with all its other forecasts. It is worth recalling all the numerous scare stories that have been run by Labour, such as the suggestion that there would be a triple-dip recession, all of which have turned out to be completely unfounded. At no time during any Labour Government have so many jobs been created in such a short period of time as has happened on the Chancellor’s watch since 2010.
The increase in economic activity is not restricted to London and the south-east, but is being felt across the UK. Business investment is higher than it was a year ago and the latest trade figures show that the gap between exports and imports is narrowing. It is not surprising that the OBR has upgraded its growth forecast this year from 2.4% at the time of last year’s autumn statement.
North Oxfordshire has a vibrant economy based on a large number of small and medium-sized businesses, many of which will very much welcome the Chancellor’s wide-ranging review of business rates. I represent two market towns, and I am sure that high street shops in particular will welcome the business rates review. They feel that the present system places them at a disadvantage compared with online competitors, because business rates are charged only on bricks and mortar. One cannot create jobs without successful businesses.
Business rates are in need of far-reaching reform. The system means that some small shops on busy high streets pay high rates, while online giants such as Amazon, which have large warehouses in cheaper locations, pay less. We need a resurgence of help for independent shops so that they can compete fairly with online businesses. Victoria Prentis, my successor as the Conservative parliamentary candidate for north Oxfordshire, is already organising meetings with the local business community, so that she can hear first-hand their thoughts and views on the Government’s consultation on business rates.
It is clear that the Chancellor is determined to help hard-working people by raising tax allowances. He has increased the amount that people can earn without paying income tax. In last year’s autumn statement, he said that the personal allowance will be £10,600 from this April. In the Budget, he announced further progress by outlining his plans to raise the personal allowance to £10,800 next year and £11,000 the year after. Let us be clear about what the Chancellor has achieved: the Budget means big tax cuts for families, because significant increases in personal allowances are tax cuts. As a consequence of the Budget, 27 million people will have their taxes cut through the raising of personal allowances. Through the raising of tax allowances, almost 4 million people on low wages have been taken out of the income tax system altogether. That is a very popular policy. It is what people want.
Many people also want to own their own home. I very much welcome the fact that first-time buyers will be able to benefit from a new Help to Buy ISA, which will offer a tax-free way of saving to buy their first home. The Treasury estimates that 285,000 first-time buyers will use the scheme every year. Someone who is trying to save a 10% deposit for a £150,000 home will have to save £12,000 and the Government will contribute £3,000, taking the total to £15,000. It is effectively a tax cut for first-time buyers.
I welcome the fact that Cherwell district council in my constituency is taking the lead in promoting more housing, with a new garden city at Bicester and the largest self-build scheme in Europe. The Help to Buy ISA will give further assistance to those self-builders, as well as to other first-time buyers in my constituency and elsewhere.
There is a lot more that I could say in support of my right hon. Friend the Chancellor’s Budget. However, colleagues and other people will have to read it on my website, because I am conscious that many other Members wish to speak in this debate. This will almost certainly be my last speech in the House of Commons. I am glad that I have been able to make it in support of the Chancellor’s Budget.
In 47 days, the nation will go to the polls. People will have a straightforward choice as to whom they wish and whom they trust to be Prime Minister: the Leader of the Opposition or my right hon. Friend the Prime Minister. I have every confidence that the nation will put its trust in the Prime Minister. I, like every other Conservative Member, will spend the next 47 days bending every sinew to help ensure the Prime Minister’s return to government and No.10 on 7 May.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The Budget painted a distorted picture of our society—one that people living in constituencies such as mine will struggle to recognise. There are low wages, almost 1 million people are not in employment or training, some 750,000 young people are still unemployed and the average family is £1,200 a year worse off under this Government.
The Chancellor told us that the sun was shining. I do not know what planet he is from, but the sun is certainly not shining for most people across the east end, where my constituency is situated. The idea is at best hollow and at worst insulting to people who are struggling, people who are having to rely on food banks and people who are struggling to pay their bills, yet the Chancellor has the nerve to say that the sun is shining. Perhaps it is shining on his friends, but it is not shining on the vast majority of people in this country, who are struggling to make ends meet.
The Chancellor’s proposals will mean further cuts in health, education, social care and many other public services. He boasted of a “truly national recovery”, yet in my constituency and across the nation, people are simply not feeling that recovery. They are feeling the squeeze on their living standards and they are feeling deeply stressed because they are working incredibly hard but their salaries are not rising.
Child poverty has been rising over recent years. In my constituency, the rate of child poverty has risen to become the highest in the country. One in two children now lives in poverty. That is a disgrace. That situation is affecting millions of families around the country, yet this Government have failed to deal with the challenge of child poverty. They have redefined child poverty rather than tackled its root causes.
Some 22,000 people in my constituency and the constituency of my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) are stuck on housing waiting lists. Week in, week out, we meet people who are stuck with disabled family members who need appropriate housing, but who cannot be rehoused because the Government are not building enough social housing, not just in London but around the country.
We also face high long-term unemployment, with long-term youth unemployment across the board at 30%. Youth unemployment for ethnic minority young people has risen in the past five years by 50%. That is a disgrace and it shows that the Government do not care about inequalities across racial groups. They pay lip service, but do nothing about the substantive inequalities they have presided over. They have watered down anti-discrimination legislation and cut the budgets of equality agencies that regulate discrimination. The Government need to think again about the massive racial and social-class inequalities that are affecting people around the country. They have done nothing to help those who face the burden of child care costs, and they have failed to deal with the many young people who are desperately looking for appropriate training and work. It would have been a great help had they said to young people, “We will give you a job guarantee and the appropriate training so that you can get an opportunity and a foot on the ladder.”
We need a much better proposition for the vast majority of people in our country who are still struggling and cannot see any hope or light at the end of the tunnel, despite the Chancellor’s reference to the sun shining. What they see and have experienced is a bleak proposition and future, and the Government have promised yet more cuts to the very services and help that those people desperately need to provide the springboard for them to succeed. The Government have said nothing about the need to tackle the millions of people now working on zero-hours contracts.
Hundreds of carers came to see me this week. They are looking after people but are on zero-hours contracts, do not have proper recognition, and are not being paid properly. This Government have closed Sure Start centres up and down the country, and many more will close because of their proposals to make stringent cuts, due to their ideological obsession with slashing and burning. That has not changed, even though we heard a lot during the last election about a new kind of Cameron Government—a compassionate Conservative Government. That is utter nonsense, and the people of our country can see the true colours of this Tory Government, despite the so-called progressive influence of their Liberal Democrat friends, which is frankly a scandal. The Liberal Democrats propped up a Government who have been vicious in their impact on communities across the country, including in my community and across the east end.
As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) said, we have been trying to fight off cuts to GPs surgeries—five were at risk of closing and we had to take to the streets to stop them closing for just two more years, although they may still close because the Government have not provided any assurances. Some 99 surgeries across the country are affected, including 22 in the east end where health inequality is scandalously high, yet the Government’s Health and Social Care Act 2012 failed to make tackling that one of their key objectives.
We have had to fight the closure of police stations. Yesterday I went to campaign for Matthew O’Callaghan in the constituency of the Education Secretary. Her constituents were saying that local police stations have closed and local council offices are used for people to make complaints that would otherwise have been made to the police. That must be done during office hours, so in an emergency there is nowhere to go, and nowhere to report a crime and receive a crime reference number for serious incidents. That is in the Education Secretary’s constituency. In other areas lights are being switched off, which is affecting women’s safety, including in the constituency of the Secretary of State for Communities and Local Government.
As my hon. Friend has said, constituencies such as ours face record cuts to further education. Nationally there are some £70 million of cuts to further education colleges, which 4 million people attend. I know that they will be rallying with their teachers, trade unions and anyone who will support them to tell those seeking election this May that their rights and needs must be understood. Parliamentary candidates, whoever they are, need to show that they care about the education of those 4 million people who attend further education colleges. This Government have slashed and burned, and ruined the hopes of those people. I call on people to take action and ensure that every parliamentary candidate prioritises the needs of their education and training. If they do not, people must ensure that parties and candidates who are not willing to support adult education and give people hope are shown at the ballot box that a difference can be made and that people’s political power is vital and will be exercised. That is 4 million members of the electorate. I hope the Government take note of their power because they will use it and demonstrate that it is not okay for the Government to come in, slash and burn, and cut off the hopes and aspirations of 4 million people who go to further education colleges.
The IFS has said there has been little detail about the cuts that the Government propose, but the poorest will bear the brunt of the likely cuts in public services. I hope the Government will set out exactly where they will make cuts, because up and down the country people are desperately worried that the cuts will fall on the NHS or local schools. The Government have already said that they will cut across budgets, including in education, and we must know where those cuts will be made. It would be fundamentally dishonest of the Government not to set out where they will be. I hope that the Government will be straight with the public and not try to deceive them—[Interruption.] If Conservative Members want to say something they should have the courage to do so; otherwise they should keep quiet. The public have heard enough from the Government and are fed up with them, as are Labour Members.
There are two visions of what is at stake in the coming weeks ahead of the general election. The Government’s plan is to impose deeper cuts over the next four years and put public services such as the national health service in harm’s way. That means more homelessness, more food banks, and less protection for the elderly who need care. It means more poverty, inequality, social division and social disunity. It means a much harsher society—I remember that clearly from when I was a child in the ’80s and we had to live during the Thatcherite period. It means a society where people are left behind in their millions. That is not the society Labour wants.
We propose a society that is united, has inclusive growth, and where we look out for those who are less well-off, give people hope and support their aspirations—a society where we invest in training and education so that our future growth is dependent on those who succeed, through investing in their education and giving people support and the opportunity to contribute to our country. It means investing in our national health service so that those who need care can get it, rather than having to rely on a poor service because we are not investing in health care—the NHS is still considered the best value health care in the world, and we should be proud of what we have achieved as a country. We must ensure that we support those who earn the least by investing in a national minimum wage, and support parents through child care. I hope that on 7 May people will look at those two visions and see ours as a progressive inclusive vision that will unite our country.
Sir James Paice (South East Cambridgeshire) (Con)
Like so many of my right hon. and hon. Friends, I expect this to be my last speech as a Member of this House. I can reflect over 28 years not least on the fact that, as I began, here I am being called towards the end of a debate and speaking to a Chamber that is virtually empty. In that regard, I am finishing in a situation similar to that in which I started.
I remind the House of my entry in the Register of Members’ Financial Interests. It will not surprise hon. Members that I wish to refer to one of my interests—agriculture. I welcome the Government’s decision to allow farmers to average their profits over five years rather than two. One of the great unnoticed issues relating to agriculture, which most Members have not registered, is that for the past 10 years there has been no direct market support. Farmers are now quite rightly—this is no criticism of policy, but a reflection on the change—dependent on world markets for the prices they receive for their products. One consequence of that, however, is massive market and price volatility; hence the logic of averaging taxes over five years. I urge the Exchequer Secretary to the Treasury, my hon. Friend the Member for Witham (Priti Patel), who I assume will respond to the debate, to look carefully at the start date. The situation is dire today. Farmers, particularly those in the dairy sector are losing a lot of money, and if the new system does not start until April 2016 it will miss the people who need help now. I hope she will look again at the start date.
I welcome the announcement in the Budget of investment in a centre for agricultural informatics. Farming is now a highly technical industry. Much of the credit for the research involved goes to, as has been said, my right hon. Friend the Member for Havant (Mr Willetts), who spoke earlier. He, of course, comes from the intellectual wing of the Conservative party—not an accusation that has ever been made about me—and he has done a fantastic job in government to support science and research. He has been probably one of the best Ministers in this Government and in the whole period I have been in this House.
My other general interest is in rural communities. I, like others, strongly welcomed the announcement on rural broadband. When I saw the reference in the Red Book to ultrafast broadband, I could not help but reflect on the fact that much of my constituency would be very happy to have any broadband at all, never mind ultrafast. I then read the next paragraph, which said that the Government are considering the introduction of the universal service obligation. Much as I dislike that level of compulsion in principle, I fear it is essential. I hope the Government will implement it. It is particularly important, given how many public services are now delivered online. It is not only the tax changes announced by the Government; farmers also have to submit all their applications and reports online.
I have had the joy and privilege of representing my constituency of South East Cambridgeshire for 28 years, and there were some specific gems in the Budget that I welcome and are relevant to my constituency. The establishment of a horserace betting right is of huge value to the racing industry around Newmarket, which is the local economy I share with my right hon. Friend the Member for West Suffolk (Matthew Hancock). It is a vital part of our economy. It is estimated that about 7,000 jobs in the immediate vicinity are dependent on the racing industry, so I welcome that.
As a Cambridgeshire MP, I strongly welcome the announcement that Cambridgeshire will, along with Greater Manchester, pilot the retention of extra business rates. Cambridgeshire has been one of the powerhouses of Britain’s economy for the past 20 years, a spin-off from science. The Cambridge science park in my constituency is tremendously successful, with cutting edge research into biotech, IT and virtually every, often unfathomable, aspect of science. The spin-offs, and the advent of other businesses moving into the area, have been tremendous. It is right that Cambridgeshire, which is one of the lowest-funded authorities in the country, should have the ability to keep that extra business rate retention. On the same front, I hope the next Conservative Government after 7 May will introduce fairer funding for schools so that those counties, including Cambridgeshire, right at the bottom of the pupil funding figures will get a far fairer allocation of resources.
Another aspect of the Budget relating directly to my constituency is the confirmation of improvements to the A14, due to start in 2017. We have been here before, but I will give the Government the benefit of the doubt this time. It is only two years away and therefore more likely to happen. I hope it will. This comes hard on the heels of the announcement, in the last round of growth funding, that we will have the money for the Ely bypass in my constituency. Again, I hoped that that would have started before 7 May. Unfortunately it will not, but I hope that that is very much unstoppable.
I shall now turn to a couple of wider issues, if I may, in this my swansong, Madam Deputy Speaker. One of the issues raised today—we are of course discussing aspects of the Budget relating to local government—is housing and planning. The one issue that has not really been addressed—I fear it has not been addressed for many, many years—is how to ensure that the huge bank of outstanding planning permissions that have been granted are actually implemented. If that were to happen, many of our immediate housing issues could be resolved. That is a huge challenge for the Government. I am not an advocate of taxation as a weapon—I will come to that in a moment—but I cannot help feeling that those businesses, or anybody who has a property or land with existing planning applications, should suffer some sort of ascending tax until they carry out the development for which they have consent.
On the wider issue of tax, one of my big regrets of my time in the House is that there is still not a common recognition that tax optimisation—in other words maximising the yield of income tax, which most of us want to see to pay for the public services we all espouse—is not the same as automatically raising tax levels. In fact, there are countless examples—under Conservative Governments, particularly those of Margaret Thatcher—where cutting tax levels has led to an increase in yield and in the contribution of the better off who were being forced to pay the higher tax rates. That has happened time and time again, yet still we hear from the Labour Benches ongoing claptrap about the ramping up of tax rates automatically yielding more money and that the rich should pay more. I do not believe that tax is a weapon for social engineering. It is a vital mechanism to pay for our public services, but all forms of taxation should be set at a level that optimises yield, does not deter reward and investment, and does not detract from future yields. It is all very well saying, “We’re going to increase it this year.” because the yield probably will go up, but in ensuing years, as people find alternative ways to handle their money, it will go down and that revenue will be lost.
I have never really envisaged leaving this place, not that I suppose anybody does. It has been a very short 28 years. I have been proud and privileged to represent a constituency that has been vibrant economically through all of that time, with science parks and research, and the traditional industries of agriculture and engineering. Virtually every sector of British industry is represented in my constituency, including the horseracing industry. I believe the essential values that brought me here—care and concern for rural communities, and the value of enterprise in generating wealth for the betterment of all of us—have served my constituency well. They have guided me through the past 28 years. I believe they have guided the Conservative Governments I have been proud to have been a part of on two different occasions. I believe they will guide the Conservative party, which I hope and believe will be elected to govern on 7 May.
Emily Thornberry (Islington South and Finsbury) (Lab)
It is a pleasure to follow the right hon. Member for South East Cambridgeshire (Sir James Paice), whom I wish the very best in retirement. That said, he is wrong about there being a Conservative Government following this one. It is clear that of all the results at the next election, a Conservative Government is the least likely.
The Budget was all about the election—there were two Budgets really. There was the reality and there was the rhetoric, and it did not take long for the rhetoric to start unravelling. Fortunately, some of the nonsense we were subjected to we will not need to hear again for some time. The pared-down, sanitised version of the Budget the Chancellor presented could be quickly unpicked simply by looking at the Red Book, which confirms our very worst fears: on public spending cuts, he and his party are just getting warmed up. On Wednesday, he claimed that living standards were higher this year than when they entered office, but on Thursday the ONS and independent think-tanks criticised his wildly inventive use of statistics. Facts and evidence had little role in his “Alice in Wonderland” version of the Budget—up was down, down was up, and a word meant whatever he said it meant. It was a transparent attempt to argue the opposite of what Opposition Members know: that under this Government, living standards have fallen and the poor are getting poorer. The impact of their reckless decisions has fallen most heavily on those least able to bear it.
Today, the Secretary of State for Communities and Local Government took up the baton in the same spirit as the Chancellor. Of all the extraordinary things he said, the thing that really struck me was his claim that the Government were building the homes the public wanted. In my constituency, the best he is likely to get for that is a politely hollow laugh. In my constituency, the average house price is £660,000, according to latest figures. How will Help to Buy ISAs help with that? How much will £15,000 in the bank help with that? It is evidence of the Government’s lackadaisical attitude to the housing crisis—stimulating demand but doing nothing on the supply side, promoting home ownership while offering nothing to the millions of private renters struggling to make ends meet.
It is often said that politics in Islington begins and ends with housing, and it is not difficult to see why. Every week, I am overwhelmed by the number of people who tell me how much they are struggling to make their monthly rent payments, pay the bills and buy essentials such as food, fuel and child care. People think they know about Islington, but they don’t: we have the sixth-worst child poverty rates in the whole country, and 40% of my constituents live in social housing. In many ways, we are a constituency of two halves, and we are separating out, and it is getting worse under this Government.
I would like to give the Chancellor a dose of reality—I would like to tell him about some of the people I have the honour to represent—but I shall begin with a few facts. Renting a flat in Islington privately now costs an average of £600 a week. Now, the Government will say it is unfair for people on benefits to get more than the average wage, and in principle I agree absolutely, but the difficulty is that if we include rent in benefit payments, and if the income cap for those on benefits is £500, it does not take much wit to work out that the vast majority of the money goes to the landlords, not to the family. As a result, people are being forced out of Islington and London, as far as they can go, but instead of dealing with prices and the housing crisis and building more affordable homes in my constituency and central London, the Government are penalising those who can least afford it and are least to blame.
A constituent came to see me two weeks ago. She has three children; she survived polio as a child—her legs are in a terrible state; she lives in completely unsuitable private housing, and has to climb 28 steps to reach her front door. It is temporary housing she has been in temporarily for four years while the council has been looking for somewhere to put her. For this, she has the privilege of paying—or the Government do—£400 a week, meaning that this disabled woman and her three children have £100 a week to live on. Is the sun shining on this family? Are things getting better for them? No, they are not.
Unsurprisingly, rents are running out of control in this area. In places such as Islington, social housing is the only realistic option, yet, despite the council’s best efforts, there are 19,000 people on the housing waiting list. In Islington, we currently have a joke: the council is working so hard to build social housing that if someone moves their car in the morning, when they come back there will be a flat there. It is doing its utmost to build social housing, but, with the withdrawal of the Government subsidy for councils to build social housing, it is hard. It is doing everything it can, and I applaud its efforts, but it is as if we are running as fast as we can and still going backwards.
Mr Slaughter
My hon. Friend is making a powerful speech. She mentioned the Help to Buy ISAs. The money the Conservatives would spend on that would build 69,000 affordable homes. Is the attitude of Conservatives not really shown by councils such as Tory-controlled Hammersmith, which sold 315 council homes on the open market, meaning that 315 families will now be in private rented accommodation and presumably subject to the benefit cap?
Emily Thornberry
Yes, and the irony is that when properties are sold and the council is allowed by the new owners to rent them on the private market, the tenants are told they have to live in the property for a huge amount of money that is then paid in benefits. It is no wonder that the benefit bill and the cost to the Government are rising.
We need to step back and look at the situation realistically. If rents are far too high, what do we do? We need to build more. If we do not, rents will continue to rise. We have to take control of the housing situation, particularly in areas of high demand, such as central London. We cannot leave it to capitalism red in tooth and claw to deal with the housing crisis in Islington. We have to intervene, and we have to believe that it is the best way of dealing with it; otherwise, we will continue to have huge unfairness.
A man and his partner and baby came to see me. They desperately want a home of their own, but they cannot afford to rent privately, so they are living with mum. Their house is completely overcrowded—it is totally unsuitable—but they have no alternative, and they will be there for years. I have another constituent living in overcrowded accommodation who has made 76 bids to move home, but she has still not been successful. Another woman is in arrears for the bedroom tax. She has had discretionary housing payments, but they were only small, and she remains in debt and is desperately worried about what will happen to her. She wants to move, but there is nowhere for her to move to.
A woman came to see me—she is not really a priority, I appreciate that—who lives in a one-bedroom flat with two children and two adults. This is like the 1920s. We are going backwards in time. People are living like this today. This family are not a priority; they are not the worst case, and their chances of getting re-housed are slender because they are only overcrowded by way of two adults and two children in a one-bedroom flat. I had a letter from another woman about high rents in the private sector. The sun is not shining on her house. Her flat is cold and damp, and there is only one radiator. Another family came to see me—four adults and two children in a two-bedroom flat.
Does this Budget solve any of these problems? Does it even think about them? It denies their existence and makes no attempt to address the problems arising just a stone’s throw from this building. We cannot continue to put our heads in the sand. We need a Government who care and are prepared to address these problems, not continue to talk in “Alice in Wonderland” terms about the sort of world we want. “We choose the future”, the Chancellor said. Well, the Government do not choose the future for the people I represent. They should be ashamed of themselves, and they will not be in government for long.
Iain Stewart (Milton Keynes South) (Con)
It is a pleasure to speak in this debate, alongside many right hon. and hon. Friends who sadly are stepping down at the general election. I shall be sad to see many of them retire, and I think the House will lose a great deal of wisdom and experience. Let me say for the record, however, that I do not intend this to be a valedictory speech! I hope the good electors of Milton Keynes South will return me in 47 days’ time.
I welcome the long-term nature of this Budget, and I believe the Chancellor is to be commended for not yielding to the temptation of using the better than expected fiscal position resulting from our strong economic performance as a windfall for short-term gains. Instead, he has stuck to his guns and sought to get the country back to living within its means.
It is easy to forget just how close to the brink this country was five years ago. We have heard from some speakers today a rather rose-tinted view of our position in 2010, but it is worth thinking about just how precarious our financial position was. It has been an incredibly difficult job in a very turbulent global economic situation to get this country back on track. Interruption.] I hear hon. Ladies opposite saying from a sedentary position that the problems were global. Yes, but in case they have forgotten, there has been a small problem in the eurozone, and this country started from a much weaker position because we ran up a structural deficit, which made the challenge even more difficult to deal with.
We must stay on course to eliminate our deficit and then start repaying our debt. That is not dry economic theory or dogma. An interesting table in the Red Book shows what the Government will spend in 2015-16. Next year, we will spend £35 billion on debt interest payments—not repaying the debt, just paying the interest to service it. That is more than we are spending on transport, on industry, agriculture and the environment and on public order. It is money that is not available for spending on defence or the NHS or infrastructure, and means passing on more bills for the next generation to take up. Addressing our debt addressed is also important for our national security. The money we borrow has to be lent by someone. The greater our debt, the more we have to borrow from other countries. The savings glut in many far eastern countries in recent years has meant that borrowing has been comparatively easy and cheap, but that might not always be available or desirable, so we are right to stick to our plans to look to the long term and pay our way as a country.
I warmly applaud the Budget measures on savings and pensions, and particularly the encouragement of personal savings that we have seen in this and previous Budgets. I do not want to encourage the stereotype of a Scotsman and his money, but I say that we need to save more as a country. That is right for the long term. Just as it is right to reduce the country’s debt, so it is right to reduce personal debt that is not secured against an asset. I warmly applaud the abolition of tax on savings for many people. Double taxation is wrong, and people were paying interest on their savings on money that they had invested after taxation. I welcome, too, the pensioner bonds that were introduced in previous Budgets as they give a higher rate of interest to pensioners, and I welcome the greater flexibility in ISAs. Encouraging saving is good for our economic security.
Let me raise one concern, however, about an otherwise excellent Budget. I refer to the restriction of the lifetime personal pension allowance. I completely understand that, as part of our objective of getting our books back in balance, we have to keep a close eye on every single item, and I accept that the cost of this allowance has gone up by £4 billion during this Parliament. It is completely understandable that we have to keep it controlled in the short term. I welcome the Chancellor’s rejection of restrictions on the annual allowance and the fact that the lifetime allowance will be indexed from 2018.
I do hope—let me make a plea perhaps not for the next Budget, but for several Budgets down the line—that as we get our finances back into the black, the lifetime allowance limits will be revisited. I say that not just because it is right to encourage the savings culture, but because it is sustainable in the long term in that the tax forgone on pension contributions is only deferred and not lost. When people draw down the income from their investments in the future, the Government will gain. It is important because pension funds will be increasingly significant for funding investments in our infrastructure.
My right hon. Friend the Member for Havant (Mr Willetts) is no longer in his place, but both he and the right hon. Member for Somerton and Frome (Mr Heath) alluded to the important pension reforms that this Government have made. The attack by the previous Government on one of the best pension funds we had, when they abolished dividend tax credits, caused huge problems for a situation that was previously well into the black. The reforms we have made have put us back on a sensible course.
I have one specific question for my hon. Friend the Exchequer Secretary. It was raised by my constituent Nicholas Clarke, who will be affected by the reduction in the lifetime limits on pensions. He has done the right thing by his family and saved into his pension fund, and he hopes not to be too far away from taking retirement. In the 2014 Finance Bill, an individual protection provision was introduced when the allowance limit was reduced previously. If the Minister does not have the information to hand, perhaps she will write to me about whether it is likely that a similar provision will be introduced to coincide with this reduction. This information would be most helpful to constituents such as Mr Clarke in planning for their retirement.
In the last few minutes, let me turn to a couple of themes relevant to the local government focus of today’s debate. On housing, I very much welcome the Chancellor’s announcement of the new Help to Buy ISA, which will be particularly useful in constituencies like mine. Our demographics show that the children of young families who moved to Milton Keynes in the 1980s, when there was a big expansion in growth, are now at an age when they want to buy their own homes. It is a perfectly natural and laudable aspiration. This new ISA, along with the stamp duty reform in the autumn statement, will help people to get their foot on the housing ladder.
Reference has been made to housing supply. In Milton Keynes, we are delivering. Our core strategy, agreed in 2013, provides for 28,000 homes over the next decade or so. The Government have helped to bring forward some of these developments—at Newton Leys in the western flank of my constituency, for example. I endorse the point made by my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), who said that we need to do all we can to bring forward these developments.
I have some concerns. Some in Milton Keynes want to go outside this plan prematurely and look at other developments—at Salden Chase, for example. I think that is very short sighted. We should consider further expansion only when it is part of a broader and more strategic view that takes into account other developments such as the new garden cities at Bicester and other places nearby. If I am returned in a couple of months’ time, this is a civic discussion that I wish to lead.
Finally, and not unrelated, is the reform of business rates announced by the Government. I very much welcome it. Under the current system, Milton Keynes pays out far more than it receives, and I would like this review to look at that balance. I was very concerned by some of the comments of the right hon. Member for Leeds Central (Hilary Benn), particularly when he said that a Labour Government would look at rebalancing the distribution of support from central Government. I worry—Labour has not been open about this—that this will mean taking money from fast-growing areas such as Milton Keynes and redistributing it elsewhere.
I note with pleasure the Chancellor’s invitation for other areas to replicate what has been proposed for business rate retention in Manchester and in Cambridge. If re-elected, I shall encourage Milton Keynes council and the business community there to beat a path to his door to see whether we can arrange something similar. That will be important for funding the additional infrastructure we need if we are to continue to grow our housing.
I would also welcome the rebalancing of business rates between the large-scale businesses and the small high-street ones. I have both in my constituency: I have everything from the big John Lewis distribution centre right down to small and wonderful local shops.
This is a good Budget for the long-term success of Milton Keynes and the United Kingdom as a whole. I look forward to participating in our further growth in the next Parliament.
John McDonnell (Hayes and Harlington) (Lab)
I wanted to focus on the issue raised by the right hon. Member for Somerton and Frome (Mr Heath) with regard to tax avoidance, but today’s theme is local government, and the right hon. Member for Uxbridge and South Ruislip (Sir John Randall) referred to the London borough of Hillingdon, and that prompts me to make a passing reference to that local authority, which I share with him. I do not recognise his depiction of its Conservative administration. In my constituency, Conservative control of that borough has created, through callousness and incompetence, the worst housing crisis since the second world war, with families living in overcrowded squalor, and hundreds now in bed and breakfasts, shunted around the country just to find a roof over their heads. The cuts in the planning department and the lack of enforcement on beds in sheds and so forth mean that some areas of my constituency are now beginning to look like a shanty town. The council is building on the green belt despite owning brownfield sites. That is because it is selling off those brownfield sites in my constituency in order to subsidise the development of facilities in the right hon. Gentleman’s constituency, and in Ruislip and Northwood as well.
I also live in a local authority where social services and care services are perilously close to collapse and where staff are working in an environment of bullying and fear. The Conservative councillors who lead the council seem more interested in increasing their allowances than the interests of my constituents. I just make passing reference to the London borough of Hillingdon.
I shall turn now to the issue I wish to raise: tax evasion and avoidance. The Budget sets the target of raising £3.1 billion through tackling tax evasion and avoidance. The Government have identified a tax gap of £35 billion, which has remained almost static for the past few years, but one of the World Bank auditors has said it is nearer £100 billion, and the tax justice campaign and the Public and Commercial Services union, which represents the tax collectors themselves, has put it at £120 billion. So on the Government’s own figures, at best we are simply going to tackle, if successful, less than 10% of the tax gap, but more realistically less than 3%. That is a dismally low target.
In yesterday’s HMRC and Treasury document on tax avoidance and evasion, I welcome the statements around strict liability, naming and shaming, the toughening up of penalties and the tackling of serial avoiders, but it has taken five years of lobbying by the Tax Justice Network and others—and I pay tribute to Richard Murphy, Prem Sikka and John Christensen. It has also taken direct action by UK Uncut, media campaigns and public pressure to get the Government to act—in their last week. But it is not action—it is not deeds; it is further consultations. This is an appalling missed opportunity.
The right hon. Member for Somerton and Frome—who is not in his place, which I understand as it has been a long debate—referred to issues to do with accountancy firms, and I agree with him. The Government’s document of yesterday places heavy reliance on those agencies at paragraph 3.19:
“Today, the government also announced it is asking the regulatory bodies who police professional standards to take on a greater lead and responsibility in setting and enforcing clear professional standards around the facilitation and promotion of avoidance to protect the reputation of the tax and accountancy profession and to act for the greater public good.”
There is a level of either complicity or naivety here. I think this demonstrates corporate capture of this Government and the Treasury by the accountancy firms, finance houses of the City and corporate law firms.
The Government are now relying on these agencies once again to police themselves. On the corporate lawyers, the Law Society tax committee is populated by corporate lawyers representing firms promoting the tax avoidance schemes. On the accountancy professional bodies, the standards and policy committees comprise the representatives of the firms making billions of pounds from designing, promoting, selling and implementing tax avoidance schemes on an industrial scale, as the Public Accounts Committee said. I refer Members to Prem Sikka’s latest article. He points out that
“the Institute of Chartered Accountants in England and Wales was formed in 1880. Here we are in 2015, and not a single accountant or accountancy firm has ever been disciplined by the ICAEW even when the schemes marked by the Big Four firms have been declared to be unlawful by tax tribunal and courts.”
Then there is the question of who is going to prosecute these firms now that we are going to introduce more criminal legislation against them. Will it be the Serious Fraud Office? Its budget has fallen from £52 million in 2008 to £35 million now. It is hardly equipped to take on these mega-corporations. In fact it is now facing lawsuits for damages from botched investigations—from the Tchenguiz brothers—and is “utterly unfit” to investigate or enforce the legislation the Government are bringing forward.
The Crown Prosecution Service is “hardly visible” with regard to prosecution of big corporations, and HMRC staffing cuts have denied it the professional expertise needed. I will come back to the staffing cuts.
Emily Thornberry
Does my hon. Friend agree that it would be an improvement in the law if there was corporate liability for the criminal acts of individuals within companies? In other words, if someone behaves dishonestly on behalf of a company, the company itself should be liable. If that law were in place, as it is in the United States, it would help with prosecutions in this country for fraud and dishonesty.
John McDonnell
Exactly, and there is some movement on that in this document, but only yet another consultation that does not define whether individuals as well as corporations will be completely liable.
The Government sometimes have good intentions. We all supported on a cross-party basis the idea that if a company is prosecuted for tax avoidance, it should not then get a public contract. We all supported that in this House, but now, two years since it was introduced, not a single tax dodging entity, despite judgments by tax tribunals, has been barred from securing public contracts. What frustrates most of us in all parts of the House is precisely this non-implementation of legislation which we think could be effective and which we have all supported.
Another issue also came up. We supported the Government’s introduction of the general anti-abuse rule. We had been campaigning for years on it, and it came into effect on 1 July 2013. The Chancellor has referred to it on several occasions in various debates. The concept is good, but HMRC cannot go after offenders on its own because the Government have, in effect, put the tax avoiders in charge. HMRC needs permission from a panel, populated by the corporate tax avoiders, before it can implement the GAAR. The panel includes, for example, a partner from Baker Tilly, a firm of accountants associated with a tax-avoidance scheme used by Aberdeen Asset Management to dodge taxes on bonuses to employees, and so far the panel has not looked at a single case. It renders debates and legislative measures in this House totally irrelevant to the real world. The real issue is that no matter how many policy statements, reports and legislation we have, it is all rendered pointless if HMRC does not have the staff and resources to implement them.
I was critical of my own Government; I opposed the staffing cuts at HMRC then. In 2005, there were 92,000 staff at HMRC. By 2015, there were 62,000 and by next year there will be a planned 52,000. That is a 43% cut in the very tax collectors we rely on to chase the evaders and avoiders. For every pound spent on a member of staff at HMRC, £25 is brought back. That is not my figure, but the independent assessment. The Government have now closed all 281 local tax inquiry offices. They have brought in a centralised call system, which is struggling on every measure. HMRC’s management have gained a reputation across the civil service for belligerent incompetence, and that was displayed when the Public Accounts Committee attempted to hold them to account. Morale in HMRC is at an all-time low, which is testified to by the Government’s staff survey showing that it had the lowest level of employee engagement across all Government departments.
We have also seen, as a result of the leaked memos of four weeks ago, the HMRC management’s union-busting strategy. They have not only targeted and victimised PCS reps, but are trying to set up an alternative staff association to break the PCS. In my view, HMRC is not only not fit for purpose, but sinking. It is in need of basic reform if it is to live up to the expectations placed on it even by the report that the Treasury published yesterday. If we are really going to tackle tax avoidance and evasion and have any hope of closing the tax gap, we need a more effective, better staffed and better resourced HMRC. We need greater parliamentary accountability, which means: a specific Minister responsible for HMRC; and a separately established Select Committee to which it is accountable. We also need resources for organisations outside Government that can monitor it and respond to the detailed, complex Government consultations. Above all else, HMRC needs staff resourcing and the reversal of the staffing cuts on this scale that have neutered its operations. If we really want to tackle the tax gap, we need to ensure that it is properly staffed, that Parliament is in control and that there is proper accountability and monitoring throughout. In that way, we can tackle the tax gap, and we can start talking about the fairness of the wealth tax, the financial transaction tax and corporate tax reform. We need not so much a long-term economic plan as a long-term fair tax plan.
Sir Andrew Stunell (Hazel Grove) (LD)
It is a privilege and a pleasure to take part in this debate. May I also say that it is a pleasure to follow the preceding speaker? The hon. Member for Hayes and Harlington (John McDonnell) has a renowned and loud voice, and sticks up not only for his constituents but for the rights and privileges of workers in the tax collection industry.
I am speaking in this Budget debate because I believe that the United Kingdom has made encouraging progress in recovering from the decade of boom and bust that preceded May 2010. It has often been painful, but we have made many of the necessary repairs to our economy. We should reflect that back in May 2010 the country was borrowing £428 million every day of the year just to plug the gap between the income to and the expenditure from the public accounts. Five years on, we have a record number of people in employment—in skilled employment, as we were reminded yesterday. Jobs growth has been highest in the north-west, and I am happy to report that unemployment in my constituency is lower than it has been for many a long year.
We have recruited a record number of apprentices. It is worth reflecting on some of the dire predictions made at the time of the Chancellor’s first Budget about the rise in unemployment that we could expect and the damage that would be done to young people and their prospects by the coalition Government’s policies—in fact, we have a record number of apprentices. I am proud of my constituency’s record in recruiting apprentices and reducing unemployment for young people. I should add that a record number of young people—including young people from deprived backgrounds—are now going to higher education.
We have raised the state pension and put in place the triple lock to protect it for the future, and we have provided the pupil premium. I was looking back at my maiden speech, having it in mind that this might well be my final speech, and noticed that I commented then on the need to get more funding for schools in Stockport. Now, with the pupil premium, we do see that help for those pupils who need it most in the Stockport school system.
We have raised the tax threshold and taken many low-paid people, particularly part-time women employees, out of the tax system altogether. The standard rate tax threshold is now at a level that not just reaches the Liberal Democrat manifesto promise of the last election but exceeds it. I remind the House that, in the run-up to that election, the Prime Minister said that, although it was a nice idea, it was quite unrealistic, so I am extremely proud and pleased to see that measure in place and the Chancellor taking it a little bit further in his announcement the day before yesterday. I am slightly less pleased to see the Chancellor and the Prime Minister campaigning around the country on the grounds that it was a Conservative policy in the first place, which it most emphatically was not.
I am pleased to see the rise in the minimum wage, which is to take effect in the autumn of this year. I am also pleased that, over the period of this Parliament, we have seen the wealthy pay more tax. Another step towards that is the reduction in the pension pot limit, which was announced this week. We see the wealthiest in society paying the most, which of course should be the case, but, more to the point, they are paying a bigger share than they were in 2010. We are also seeing the equality gap closing to the benefit of those who are least well off in society.
Let me comment briefly on one or two Budget announcements tucked away at the back of the Red Book on page 100. I am particularly pleased to see money being put into tackling the abuse of nuisance calls. As an active member of the all-party group on nuisance calls, ably led by my hon. Friend the Member for Edinburgh West (Mike Crockart), I was delighted to see such a measure, and I know that that will be the case for many of my constituents too.
I wish to comment on the expansion of the church roof repair fund. When the fund was initially announced, I wrote to churches and church organisations in my constituency, more in hope than expectation, and was delighted to get the response I did from them. I know that it was oversubscribed even in my own constituency, so to see that being taken further is very welcome news.
Let me focus a little on infrastructure spending, particularly housing. I wish to agree with the many speakers who have said that the volume of house building is important. I have already noted the fact that we have restored and increased the number of social and affordable homes for people, with the 4 millionth such home being opened in my constituency some 12 months ago. It is a question not just of volume but of quality. I was pleased to have been the Minister who signed off a 25% increase in energy performance standards required of new homes. I commend my successor, my hon. Friend the Member for Bristol West (Stephen Williams), for going a step further this year and for pushing forward towards zero-carbon homes, but there is still more to do.
I am pleased with the steps that are being taken on transport. The northern transport strategy and the proposals related to that are certainly very good news. The money being invested in the northern hub and, even more importantly, in the abolition of the dire Pacer trains is thoroughly welcome as well. We are looking forward to the outcome of the rail franchising, which is currently going on, to see further advances and improvements in rail travel in my Hazel Grove constituency.
I want to draw attention to two events that have taken place this month, which show powerfully how the coalition is delivering on its infrastructure promises. The first of those is the ceremony I attended for the turf cutting of the first phase of the A555 Hazel Grove bypass. That project was shown as a dotted line on A to Zs published in the 1960s. It is something else about which I spoke in my maiden speech and so it is a great pleasure to tell the House that we have now cut the ground, that the diggers are starting and that the road is coming.
I am also very pleased by a second event. Yesterday, the Chief Secretary to the Treasury announced that a grant of £350,000 has been made available for the feasibility study for the next phase of the same road. I very much hope that that will be the first step towards relieving significant pollution, congestion and health damage to my constituents.
In his Budget statement, the Chancellor described the restoration of the UK’s finances as an unfinished task. I strongly agree with that judgment and with the Chief Secretary to the Treasury, who told the House yesterday that the task of repair will be completed in 2018 and that we must then use the growth in our economy to support vital public services such as the NHS and the police. I also support what the Secretary of State for Business, Innovation and Skills said yesterday about the importance of promoting growth in key sectors of our economy and I give credit to him for the work he has done in ensuring that those key sectors received strong coalition support as well as on promoting exports and supporting small and medium-sized enterprises.
That brings me briefly to the banking system. I am concerned that we have not yet dealt with the problem of access to finance for small businesses and I regard that as unfinished business for the future.
I guess that every Member of Parliament chalks up not just successes but one or two regrets. I shall keep most of those to myself, but I want to mention one that will, I hope, reach the ears of the House authorities, and that is the utter failure of this place to provide effective hearing loops for those of us with hearing aids. This is a long-running battle of mine and I am in contention with the Administration Committee. I have spoken to all sorts of people within the House and it seems to be beyond the wit of technology or ingenuity to find a system that is effective for those of us with a hearing disability. In particular, I want to mention that that affects my constituents when they come here. My constituency is some 180 miles away and people come perhaps once in a lifetime to a meeting in this place and for them to be stuck at the back of the room where they cannot hear a word is discourteous to them and entirely improper for this House.
Nobody can do this job without help and support from elsewhere. I have done this job with enthusiasm and energy for 18 years only because I have had the active support of my wife Gillian.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. We have three speakers and I am very keen that we should get everyone in, but we must get to the wind-ups before 10 past 2. I am very sorry, but may I ask each speaker to consider using eight minutes rather than 10?
Mr David Anderson (Blaydon) (Lab)
Thank you, Madam Deputy Speaker. Having sat here for the past four hours, I will try my best to do as you say. In passing, may I wish you all the best for your future as well as your partner, who is a very good friend of mine from way back?
Nothing epitomises this callous Government more than what we saw on Wednesday at Prime Minister’s Question Time, when the Prime Minister, as usual, tried to make a joke out of it and said that the leader of my party:
“does not know where his next meal is coming from”.—[Official Report, 18 March 2015; Vol. 594, c. 755.]
The sad reality in this country is that far too many of our citizens do not know where their next meal is coming from, but 2 million do—it is coming from the food banks. What an absolute disgrace. What a record of failure. It is those people who will again face the brunt of Tory policy—whether in trying to find out the £12 billion of secret welfare cuts or the £13 billion of secret public sector cuts, neither of which have been spelled out in the past three days of the Budget debate. So can we trust the Chancellor going forward? He has failed miserably up to now.
May I add, Madam Deputy Speaker, that I do not have any problem with hearing, but I do have a problem when people talk during my speech, as the right hon. Member for Hazel Grove (Sir Andrew Stunell) is doing now.
Let us have a look at this Chancellor’s record. This week we had a report from the King’s Fund. The NHS has supposedly had its budget protected, if we are to believe what the Government said, and yet the number of cancelled operations is up by a third. Ambulance response times are going backwards; all three national targets have been missed this year. Sixty out of 83 foundation trusts are in deficit.
In A and E, in December 2014, 414,000 people waited longer than four hours—a 47% increase on the previous quarter. In December, 42,000 people waited on trolleys—a 124% increase since 2013. Sixty-six foundation trusts missed the target for A and E waiting times—double the number in 2013. The percentage of people waiting longer than 18 weeks for treatment was up from 2.5 million in 2010 to 3.2 million in 2014. In the last year alone, there has been a 30% increase in people waiting longer than 18 weeks for treatment. In this country, 12.5% of patients are waiting longer than 18 weeks—the worst ever recorded level.
For cancer, there is a 62-day target for people to be treated. Although the target was met in 86.7% of cases in April 2010, it was met in only 83.5% of cases in October 2014. In December 2014, 31 trusts missed the target—double the number in the middle of last year. In adult social care, because of 12% cuts across council care budgets we have seen a 25% reduction in the numbers receiving community care services. That obviously has a huge knock-on effect on the capacity of the NHS.
Another public service hit by this Government—another public service struggling—is the police service. The Metropolitan police have 1,748 fewer police officers than in 2010. Over half a million rest days were owed in one year. That means that every week in this city, 1,000 policemen are working shifts for which they are not getting paid. In addition, 43% of officers say they are suffering from stress-related illnesses. Case loads are described as unmanageable. More people than ever are living in this city—nearly 9 million more people—and £1.5 billion less is being spent on them. That is the legacy of this Government.
The Prison Service is in disarray. This week, the Prison Officers Association responded to the news that its members would not be getting a pay rise by saying that in the past year there have been 4,000 assaults on prison staff; a 40% increase in serious assaults; an overcrowded prison system, with a prison population at record levels; 3,500 fewer officers to the year ending 2014; a service that is finding it difficult to recruit and retain; staff forced away from their homes and families because they are being put on detached duty to make up for lost staff; and motivation and morale at an all-time low. It is no wonder, because the service is failing to meet every recognised health and safety requirement.
I received a letter from a constituent, Craig Robson, who is a prison officer. This is what he said to me:
“Dear Dave,
As you can see, one of your constituents who was”
once
“a proud Crown servant is”
yet again
“being treated as a second class citizen”
with
“a pay rise of 0%. I will give you some history. The last 5 years have been”
for me
“0%, 0%, £100, 1%, 0%.”
These are supposed to be pay rises.
“Am I happy? No, but to add insult to injury I was looking at a pay note from”
September 2011 and comparing that pay note with the one I received this month.
“I am now £109.41 worse off”—
£27 a week worse off. When the Tories deny the claims that we make regularly that people are £1,600 a year worse off, they might be right, because that gentleman is a lot more than £1,600 worse off, and that takes no account of inflation. He goes on to say:
“The prime minister stated not two weeks ago that he thought everyone should have a pay rise. What happened to loyal servants who were in hand to hand combat”
in jails every day up and down this country?
What we have seen is a record of failure: every target missed; a record of pain for those who are least able to handle it; and a record of spin and deceit from the Tory party. Gull manure was talked about earlier. It is not gull manure that we are getting from this Budget; it is bull manure—left, right and centre—and there is a promise of more to come. The Tories promise more pain for those who are on welfare, more cuts for our essential services and more bungs for their friends, whether MPs in marginal seats or their friends in the City. They are failure personified, and this country will have a chance in seven weeks’ time to hold them to account for their failure and for the way in which they have led this country astray.
Laura Sandys (South Thanet) (Con)
It is pleasure, although with a significant amount of disagreement, to follow the hon. Member for Blaydon (Mr Anderson). We must remember exactly where we have come from, not just where we are today. We inherited a total economic mess, and as with school reports, it is not just the overall score card that matters; it is the difference between the starting point and where we are today: unemployment from 8% in 2010 to 5.7% now; the deficit halved; and growth up to 2.5% this year, compared with a contraction of 5.2% in 2009. This is real progress, with some tangible outcomes for my constituents in Thanet.
I should like to plagiarise the Chancellor and say that, although I agree with him about the comeback country, with his help over the past five years, we have also been able to achieve the comeback constituency. His help specifically has been instrumental. He, my right hon. Friend the Member for Havant (Mr Willetts) and the leader of Kent county council were instrumental in helping us to deal with a major crisis in my constituency after the announcement that Pfizer was going to pull out of Sandwich. What did the action Chancellor and the action Prime Minister do? Within hours, we had a taskforce, driving through and delivering an enterprise zone, £40 million for small and medium-sized enterprises in east Kent and important upgrades of the rail service. Today, people from Sandwich can get to London in an hour and a half. Getting from Ramsgate to London will take just over an hour in the near future. SMEs across the constituency have interest-free loans and businesses are going from strength to strength.
Although I am extremely sad to leave and really love my constituency, I am pleased that my departure has further supported the local economy, with half the lobby spending a lot of time in the pubs in my constituency, desperately seeking Nigel and hunting down the Pub Landlord. I am pleased that my departure has offered the bars, restaurants and hotels such roaring business. At least, they will all welcome the 1p off beer and a reduction in the price of Scotch whisky.
Helping the people of South Thanet is something that I have been privileged to do. I love the attitude of the residents of Ramsgate, the pride of those in Broadstairs, the edginess of everyone from Cliftonville—they know exactly what I mean by that—and of course the charm and beauty of Sandwich and my villages. I hope that we might be able to demonstrate that we have made a difference in the past five years and that they will benefit in the future from a Conservative Member of Parliament and a Conservative Government, securing the progress that we have already made.
We have had a significant fall in jobseekers from 6.4% to 4.3%. We have the most successful and vibrant enterprise zone in the country. The Chancellor announced in the Budget that we would have a further extension of the enterprise zone in Sandwich, and we have secured £20 million to fund flood defences for Sandwich as well.
Of course, I would never have been able to make anything happen without my fabulous team, because nobody in this place works on their own; it is an individual business and an individual career, but with a huge amount of commitment from the people around us. I would like to thank them for that.
It is also the people in this House, friends and colleagues on both sides, who have contributed so much to my respect for this place and my ongoing commitment to raising its profile and ensuring that it has a better reputation among those outside. I will definitely be working with many Members in future, both those who are retiring and those who are returning. While I have been here I have been called Mrs Rubbish because of my interest in waste resource, and hopefully I have also raised the profile of epilepsy.
This is a strange place. I was christened here, so I have felt some connection with it from a very early age. But it is a place that needs to think again about what it wants and how it wants to encourage new people, new ideas and new diversity into it. It needs to think again about what makes it really special and not to be captured by the fear of change. Nostalgia is a dangerous think, because it often looks back and transposes historical references where they did not exist. Personally, I believe that we need to reduce the number of MPs and give them more fulfilling roles. Professionalism is to be aspired to, not shunned; a big ask, and there is still a long way to go.
I say this to the wonderful colleagues I have met on both sides of the House over the past five years: hold your heads up high, because no one else will. Hold the media to account by not playing the gossip column game but instead demanding that they report the serious stuff that really goes on here, because this House is occupied by some of the most honourable people I know.
I have learnt a lot about people, about politics and, most certainly, about myself. I want to thank the residents of South Thanet for giving me that privilege. Although I would like to have served longer than five years in this place, I hope that I have given my best to improve circumstances and lives across the constituency. I would like to thank the staff of the House, and I will miss those pesky little mice that run across my foot on the Terrace when I have breakfast in the morning.
Sir Edward Leigh (Gainsborough) (Con)
It is a great pleasure to be the last Back Bencher to speak in this debate and to follow my hon. Friend the Member for South Thanet (Laura Sandys). Ann Treneman, the sketch writer for The Times, described her as one of the few eminently sane Members of the House. I am still looking forward to a sketch writer describing me that way—one lives in hope.
I am the last Back Bencher to speak, and I sometimes think that I am the last Thatcherite standing. I have spoken in most of the 32 Budget debates in my time in Parliament. I have some bad news for you, Madam Deputy Speaker: I hope that this is not my valedictory speech, but you at least will not have to hear me again, and that will be a great solace to you. I am standing for election again and hope that the good people of Gainsborough will re-elect me. I will be standing on the same platform on which I have stood at all the previous election. It is a pretty simple message—speaking up for a strong Budget and a well-defended country—and it is worth repeating.
My predecessor in Gainsborough had quite a relaxed view of campaigning in the constituency. Having ridden for a couple of hours in the morning, he would return to the White Hart hotel in Lincoln for a large breakfast before pondering his sole press release of the entire campaign, which he used to deliver on a certain day to the editor of the Market Rasen Mail. At one general election—perhaps it was his last—when he went to deliver the press release the editor was out, so my predecessor, Sir Marcus Kimball, said he would come back tomorrow. When he came back the next day, the editor said, “Don’t worry about a new press release; I’ll just use the one from the previous general election.”
In a sense, times do not change, because the same themes come back again and again. I apologise if sometimes I weary the House with the same themes in these Budget debates, but they are two incredibly important ones that need emphasising again and again. The first is the need for tax simplification, and I shall say a bit about that in a moment.
The second theme is budgetary and fiscal responsibility. I said earlier that I may be the last Thatcherite left standing; in fact, I sometimes think that I am the last Gladstonian Liberal in this place. I believe that if Governments restricted themselves to avoiding foreign entanglements, or foreign wars—I have, I think, voted against every single one that has come up during my time in Parliament—and attempting to balance the budget, that would do more for human happiness than virtually anything else they could do. Balancing the budget is the first duty of government. It has to be said again and again that we are still borrowing £93 billion every year.
After five years of austerity from this Government that has been roundly criticised by Labour Members, we are still spending £93 billion more than we earn every year. When we came to power, the figure was £141 billion a year. That was completely unsustainable five years ago, and it is still unsustainable. The national debt stands at a staggering £1.5 trillion. One can criticise the present Government, but at least, without getting involved in clichés, they have a long-term economic plan to try to ensure that by next year, or the year after, that massive debt as a proportion of GDP at last starts to decline in cash terms by the end of the next Parliament.
These are not just figures. This is a matter of desperate importance to everybody in the country. Debt on that scale is simply unsustainable, and any incoming Government —I say this to my Labour friends—must have some sort of plan for dealing with it. Yesterday I intervened on the shadow Chancellor, who gave a good, knockabout speech. He portrayed himself as a minor Shakespearean poet and it was all quite good fun. It was extraordinary, however, that he spent very little time outlining how he was going to reduce the deficit. Perhaps we have been too complacent in making these arguments to the British public. When we argue that we have halved the deficit, perhaps some members of the public say, “Well, problem solved. If our debt is halved, does that mean we’ve already arrived at the end?” No, it does not—it means that we were borrowing £141 billion a year and we are now borrowing £93 billion a year. Perhaps this has given the Labour party an opportunity to relax the public mood on deficit reduction.
What are the plans of the Labour Opposition to reduce the deficit as they prepare, they hope, for government? When we questioned the shadow Chancellor yesterday, he said he was going to prevent more free schools opening, abolish police and crime commissioners, and try to get more efficiency savings in the NHS. Is that really a plan that holds water? Can we really believe that it will solve the problem that I have been emphasising in the past few minutes? I do not think so. Labour Members are very proud of the fact that they dramatically increased spending on the national health service and on education, but the problem with dramatically increasing spending on the national health service was that they dramatically reduced productivity in the national health service. There is nothing to suggest that if one increases spending on the NHS by more, roughly, than the real rate of inflation, one will avoid, once again a massive reduction in productivity.
The Labour party must ask itself this question: how it is going to balance the books? I believe that, fundamentally, it is the central economic questions that decide general elections. I do not think that they are decided solely on the basis of what has been said during the latest television debate on television. What is important is how much confidence the public have in those who are charged with the public finances. I know that we are about to hear a speech from the shadow Treasury spokesman, but so far I have waited in vain for proof that the Labour Opposition are ready for government, and ready to deal with the budget deficit.
I have said enough about that subject, but I think it is one to which we must continually return. If we are fortunate enough to be re-elected in 47 days’ time, we must not let up for a moment. However unpopular and difficult it is and whatever the pressures, we must sustain our absolute determination to start reducing the total national debt, in cash terms, by the end of the next Parliament.
I suspect—although no one quite knows—that if the Labour party is to fulfil its proper and understandable ambition to spend more on education or the national health service, it may have to borrow an additional amount of up to £30 billion a year. In good times, that is sustainable, but what happens if there is another downturn? What happens if the cost of borrowing rises, as it inevitably will? It will all have to be paid for. That is the central argument of the campaign, and the Labour party must deal with it.
Let me now say a little about tax simplification. I know that it is hard when there has been a recession; I know that the Chancellor has had to struggle with the difficult campaign to attempt to start reducing the deficit; I know that every type of tax simplification is extraordinarily costly, in both monetary and political terms; and I understand the difficulties that the Chancellor had three years ago when he tried to simplify VAT. I know all those things. Nevertheless, tax simplification, along with a flattening of the system, is right in the context of entrepreneurship and efficiency. It may not be politically apparent every year—Chancellors obviously want to present popular Budgets—but in terms of financial orthodoxy and the right way to manage the Government’s finances, tax simplification makes sense.
We have already been given a bit of tax simplification. We are to see the end of the tax return, the creation of online tax accounts, a new personal savings allowance, and the phasing out of class 2 national insurance contributions for self-employed people. They are all good steps, but they are only the first steps. I hope that, if the Chancellor is fortunate enough to be back in his job in 50 days’ time—and I pray that he will be, for the reasons that I gave earlier—he will make not just dealing with the public finances but simplifying taxes his guiding light for the next Parliament. We still have one of the longest tax codes in the world; I believe that it is the longest after India’s.
Labour portrays itself, quite rightly—why shouldn’t it?—as the party of the labourers, but it does not help the people who labour for profitable companies if we increase taxes on those companies, because that puts pressure on them to reduce the number of people they employ. What I have been talking about today is not some airy-fairy, ideological point that has been made just for the sake of it, but an attempt to help ordinary hard-working people in jobs, to help those people to keep their jobs, to make companies profitable, and to enable the country to have confidence in itself. That is why I shall be proud to be standing as a Conservative Member in 47 days’ time, and why I shall be praying that my right hon. Friend is back in his job as Chancellor of the Exchequer.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I want to put on the record my acknowledgment for all their years of service to their constituents of the right hon. Member for Bexhill and Battle (Gregory Barker), the hon. Member for South Suffolk (Mr Yeo), the right hon. Members for Havant (Mr Willetts), for Somerton and Frome (Mr Heath) and for Uxbridge and South Ruislip (Sir John Randall), the hon. Member for Bury St Edmunds (Mr Ruffley), the right hon. Members for Banbury (Sir Tony Baldry), for South East Cambridgeshire (Sir James Paice) and for Hazel Grove (Sir Andrew Stunell), and the hon. Member for South Thanet (Laura Sandys).
John McDonnell
I apologise for intervening, but in my enthusiasm to attack the Government I failed to refer to the retirement of the right hon. Member for Uxbridge and South Ruislip (Sir John Randall), who has been an absolutely sterling colleague for me in Hillingdon and has served his constituents so well.
Luciana Berger
I thank my hon. Friend for his intervention. We have heard some wonderful valedictory speeches, and I wish all those right hon. and hon. Members well in their future endeavours.
We also heard some very impassioned speeches from my hon. Friends. My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) told us about unemployment in the north-east, and said that there was more of a northern outhouse than a northern powerhouse. My hon. Friend the Member for Croydon North (Mr Reed) spoke about his local hospital having to declare a major incident, and about how the Budget has done nothing for the NHS. My hon. Friend the Member for Luton South (Gavin Shuker) helpfully shared with the House excerpts from the 2010 Red Book. We should all remember his point that the Chancellor’s actions during the past five years have been worse than doing nothing at all.
My hon. Friend the Member for Blaenau Gwent (Nick Smith) talked about the proliferation of food banks and charity shops, which have increased in number in his constituency since this Tory-led Government came to power. My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) talked about the north-east, rising inequality and the deep and growing divide between the north and the south. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) raised serious concerns about funding for health, which I will come on to, and the devastating cut of 24% in further education announced this week.
My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) talked about the impact of stagnant wages and particularly about the poverty that affects her constituency more than any other part of the country. That was echoed by my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) in relation to the challenges faced by her constituents in making ends meet, and with her very moving stories about overcrowding and the effects of the bedroom tax and escalating rents. My hon. Friend the Member for Hayes and Harlington (John McDonnell) rightly talked about HMRC’s lack of action in tackling tax avoidance and evasion properly, and the 43% cut in the number of people working for it. My hon. Friend the Member for Blaydon (Mr Anderson) spoke about the cuts to social care, and particularly the cuts to prison staff that have led to a very serious increase in the number of assaults.
I have to say that I found the Chancellor’s Budget speech curious. There were parts I could agree with, such as the devolution of business rates, although it is not clear why he stopped at Cambridge and Greater Manchester; there were parts that were audacious in the extreme, such as his recollection of his deficit reduction plan in 2010; and there were parts that made me wonder whether he and I inhabit the same country.
I was struck by the Chancellor’s assertion that households will be on average £900 better off compared with 2010, and that they will be more secure. It is almost as though he thinks that the very fact that he has decreed it means that it will be so. Should that fail to become the reality, he had a very handy new measure of living standards to fall back on. It is a flawed measure, because it includes income to universities and charities, but it is a measure all the same. Sadly for him—more sadly for families struggling to keep their heads above water—even his new cunningly crafted measure shows that living standards in the first quarter of 2015 have gone down, not up, compared with the first quarter of 2010.
That Budget measure and other more sensible ones demonstrate what we know to be true: it is harder now to make ends meet. Household incomes are down compared with 2010, as the IFS confirmed two weeks ago, and wages after inflation are down by more than £1,600 a year since 2010. I know that to be true because people tell me it all the time in my advice surgeries, in their e-mails and on the doorstep. The Chancellor may have decreed it, but, sadly, he has not made it so.
The welcome growth that we are finally witnessing in the UK economy has been a long time coming. With our economy still vulnerable, we warned in 2010 that the Chancellor’s decision to accelerate tax rises and spending cuts would hit confidence and choke off our economic recovery, and so it has proved. We have had the slowest recovery for 100 years. Growth is still lower than was forecast in 2010, and it is set to be slower this year and next year than it was last year. Productivity is down—UK output per hour has fallen to 17% below the rest of the G7, the largest gap since 1991—but the Chancellor did not once mention the word “productivity” during his speech. For working people, we have an economy in which too many workers suffer low pay or, worse, are on contracts with no guarantee of being paid at all.
Our economy may be growing, but it remains too unproductive, unbalanced and insecure. We needed a Budget that addressed those issues, and that established a proper British investment bank for small and medium-sized businesses and an independent national infrastructure commission, which would lead to a properly co-ordinated industrial strategy. The uplift on business rates awarded to Greater Manchester and Cambridge is welcome—it was Labour’s policy, after all—but why has the Chancellor stopped there? Why has he not gone further? Our plan is for more extensive devolution—£30 billion-worth—and for it to be countrywide, whether people choose to have an elected mayor or not. Every part of the country will benefit from Labour’s plans. For prosperity to be shared, it must be felt by the many, not the few.
The Tories seem hellbent on decimating the services relied on by the many. The NHS, also conspicuously absent from the Chancellor’s speech and already under real strain, will be an inevitable victim of his colossal programme of cuts. Be under no illusion: page 130 of the Office for Budget Responsibility’s “Economic and fiscal outlook” makes it clear that the Chancellor’s proposed spending cuts for the next three years will be deeper than those that have been made in the past five years. Massive cuts will be made to policing, local government and defence budgets. In the end, those Departments will not be able to deliver the scale of cuts required, and the axe will inevitably fall on the health service.
Our NHS is in no fit state for a white-knuckle ride. Already, more than half of nurses say that their ward is dangerously understaffed. Waiting lists are at their highest for six years, and one in four people are waiting a week or more to see their GP. In the past 12 months, more than 1 million people have waited more than four hours in A and E. The Tory care cuts of more than £3 billion have been the root cause of the A and E crisis during this Parliament. If they are allowed to do the same in the next Parliament, it will entrench the crisis, not only in A and E, but across the whole NHS.
A Labour plan and Budget would look different. Our plan will deliver a rise in living standards for the many and the stronger growth that we need. It is a fairer plan. We will reverse the tax cut for millionaires, introduce a mansion tax to fund the NHS and abolish the bedroom tax. We will build a truly national recovery, stop exploitative zero-hours contracts, raise the minimum wage and cut tuition fees to £6,000. Labour has a plan to build at least 200,000 homes a year by 2020, creating up to 230,000 construction jobs. Our plan will restore the link between the prosperity of the nation and the prosperity of the individual, protect the NHS and get the deficit down. In our plan, when the country succeeds and grows, its people will too.
The Exchequer Secretary to the Treasury (Priti Patel)
I pay tribute to all right hon. and hon. Friends and Members who have spoken in this debate. Some of them have spoken for the last time, and we should note their distinguished service. Their contributions will be missed in the next Parliament. I will particularly miss their wisdom and guidance
This is a Budget that rewards hard work, cuts taxes for millions of people and empowers families and businesses. It gives people more incentives to save and greater choice over how they spend their savings and pensions. It is a Budget based on a long-term economic plan that is working. It is a plan that is growing our economy and providing a better future for our country; that has given more people the chance to get on in life, with record numbers of people in employment; and that is providing more security for the long term, with the deficit down and our national debt starting to fall as a share of the economy.
Five years ago, our economy had suffered a collapse greater than that seen in almost any other country. Today, alongside jobs, growth, new business start-ups, new housing zones, enterprise zones, support for savers and for people who aspire to own their own homes, we have lower inequality, child poverty down, pensioner poverty down to record lows, the gender pay gap smaller than ever, and the number of students from disadvantaged backgrounds at university at a record high. The stability that we have put in place has taken Britain from austerity to prosperity.
Listening to the contributions of Opposition Members, I was struck by their complaining that the economic recovery is not taking place fast enough in their eyes. I have heard their message, but it was they who crashed the British economy. It was on their watch that the debt-fuelled economy was created, that manufacturing halved as a share of the national economy and that the gaps between the north and south and between the rich and the poor grew ever larger. Yet their complaint is consistent: the Government are not fixing their appalling legacy fast enough.
This afternoon, we have heard, from constituency to constituency—from Newcastle upon Tyne East to Croydon North to Blaenau Gwent to Luton South to Islington South and Finsbury to Poplar and Limehouse—from Labour Members who have opposed every single measure undertaken by this Government to put us back on the path to recovery. Let me respond to some of the points that have been made in this wide-ranging debate.
Housing came up consistently. Since 2010, more than 200,000 affordable homes have been delivered. Council house building starts are at their highest level in 23 years. In the year to December 2014, 250,000 new homes were granted planning permission. In London alone, £1.1 billion has been provided to the Greater London authority to deliver affordable housing zones. Labour Members may complain, but their complaints are actually a demonstration of the failure of Labour local authorities to deliver housing.
Priti Patel
Actually, it is not nonsense. It is a failure on the part of Labour.
Emily Thornberry
Will the hon. Lady tell us how many affordable homes the Mayor of London has built in Islington? I do not mean homes at 80% of market rent; I mean truly affordable homes that have been built by the Mayor of London in Islington. If she has that figure, she will realise that what she has been saying is nonsense.
Priti Patel
I will correct the hon. Lady. It is not nonsense. The money has gone to the Greater London authority to deliver affordable new homes. She said that the Help to Buy ISA would not help her constituents. It is projected to help 190,000 people in London buy their first home over the next five years. Of course, the average first-time buyer is a basic rate taxpayer.
We have heard complaints that the North East combined authority is not doing enough. Let us be clear: more people are employed in the north-east then ever before. We have heard about Croydon. There has been £7 million of funding in Croydon and the GLA is delivering 4,000 new homes and 10,000 new jobs. Those are positive and proactive measures that are transforming people’s lives.
When it comes to job creation and job growth—
Priti Patel
The hon. Gentleman will recognise that I do not have time to give way.
In every single region of the United Kingdom, unemployment has fallen over the past year. We should put to bed the desperate myth of the Labour party that the new jobs are somehow second-tier jobs. That is an insult to the British public. Some 80% of the jobs are full time and 80% of them are in skilled occupations. Each and every one of them represents one more person standing on their own two feet. The Budget delivers for every single region of our great nation, whether it is by helping manufacturing in the midlands, connecting the south-west or growing the economy.
I would like to pay tribute to a number of Government Members. My right hon. Friend the Member for Bexhill and Battle (Gregory Barker), my hon. Friend the Member for South Suffolk (Mr Yeo), my right hon. Friends the Members for Somerton and Frome (Mr Heath), for Havant (Mr Willetts) and for Uxbridge and South Ruislip (Sir John Randall), my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), my right hon. Friends the Members for Banbury (Sir Tony Baldry) and for South East Cambridgeshire (Sir James Paice) and my hon. Friend the Member for South Thanet (Laura Sandys) are all distinguished Members who have made substantial contributions to the House and to this afternoon’s debate. They covered some of the key Budget points that affect their constituencies. They drew on their expertise from their time in the House or from their time as Ministers to speak in detail about infrastructure, energy, jobs, education and higher education.
My right hon. and hon. Friends also spoke about the prudent financial management that this Government have introduced through our long-term economic plan. It is this Government who have set out long-term economic plans for every region in the United Kingdom. It is this Government who are committed to investing in the whole of the United Kingdom. It is this Government whose long-term infrastructure plan is connecting our regions.
My hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned the housing growth and infrastructure growth in his constituency. I will come back to him on the personal pension allowance, which he asked me to do. We are allowing the local leaders in our communities to make the key growth-delivering decisions in their areas, rather than making top-down decisions from the centre. We are recovering from the worst recession since the second world war. We are turning the country’s finances around, improving the lives of hard-working families, and putting more of people’s hard-earned cash back into their pockets where it belongs. We are increasing living standards, with real household disposable income revised up to increase by 3.7% this year, and to keep on rising—[Interruption.] As ever, the Labour party sneers when it comes to discussing living standards and household incomes. [Labour Members: “What?”] Well, let us be clear: the best way to improve living standards is to get people back into work and boost productivity and growth. This Government have delivered the highest levels of employment ever. Unemployment is down to 1975 levels—it has fallen at its fastest and was down by just under 500,000 in the year to December 2014. We are putting Britain back on its feet, and this Budget marks a step in delivering prosperity to all corners of our country.
The choice our country faces is between returning to the economic chaos that Labour Members were part of under the previous Government, or sticking to the long- term economic plan that will deliver for the constituents of the hon. Member for Islington South and Finsbury (Emily Thornberry) and every Member of this House. In this Budget we choose the future and are taking another big step on the road to a stronger economy.
As I close this debate I thank all hon. Members for their contributions this afternoon, and in particular I send—[Interruption.] I hoped for a degree of courtesy and civility at this point. I send my best wishes to all right hon. and right hon. Members who have made their last contributions in the Chamber today. I thank you, Madam Deputy Speaker, for your time overseeing debates and the civil way you have handled them, and I commend the Budget to the House.
Ordered, That the debate be now adjourned.—(Greg Hands.)
Debate to be resumed Monday 23 March.