Budget Resolutions and Economic Situation
Brooks Newmark Excerpts(9 years, 2 months ago)
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John Healey (Wentworth and Dearne) (Lab)
It is a pleasure to follow the hon. Member for Fareham (Mr Hoban) in his last speech to the House. Like you, Madam Deputy Speaker, I faced him through the long hours of many long Finance Bills when he was on the shadow Treasury Front Bench. His reflective and loyal speech this afternoon was characteristic of the way he has served his party and Government. It is a shame he is not on the Front Bench this afternoon, because perhaps then he would not be leaving the House come Dissolution.
However, the hon. Gentleman has a problem, because, as the Leader of the Opposition said, this is a Budget that cannot be believed. I shall pick just two things that the Chancellor said during his Budget statement. He said that living standards were higher than when they entered office and that our economy was fundamentally stronger than it was five years ago. The gap has never been greater between their rhetoric and the everyday reality of people’s lives. I want to pursue two arguments that expose some of the rhetoric we heard from the Chancellor and some of the reasons why their long-term economic plan is failing and why the structural and cyclical weakness of our economy remains five years after they entered office.
There are two principal arguments. First, the Government’s economic policy directly choked off the recovery under way at the last election in May 2010, leading to the slowest economic recovery from recession in this country for 100 years. Secondly, the economic recovery is unbalanced, unequal and unsustainable. The structural weaknesses are still there, despite the rhetoric from the Chancellor—the rabbits coming out of the hat—and the underlying failures of the long-term economic plan are unchanged by this Budget.
Mr Brooks Newmark (Braintree) (Con)
I am listening carefully to the right hon. Gentleman, as are many Members opposite. Would he at least acknowledge that running a deficit of more than 10% was unsustainable? It might have fuelled some growth in the short term, but in the long term running a deficit in excess of 10% was not sustainable, and something had to be done about it.
John Healey
There are not many Members opposite, as the hon. Gentleman says. [Interruption.] He will remember, however, that after 10 years of the last Labour Government, before the global financial crisis and recession hit, borrowing and debt were lower than when we entered office. We have a deficit to deal with because of how the Government intervened to pull the country through that deep recession, to keep people in their homes and jobs and to keep firms in business. Of course there is a deficit, and of course it needs to be dealt with. The difference between the parties is that we will deal with it in a more balanced way. There is a choice. We can do it with tax rises that are fair, spending cuts and efficiencies. We will do what we need to do in a more balanced way.
Mr Redwood
I am giving the cash numbers, which are clearly set out on page 111. If the hon. Gentleman is patient, I will come on to deal with the argument about real terms and the percentage of the economy.
Let us start with cash. The £60 billion increase in the annual spend at the end of the period is a big increase, and if we can keep inflation of costs down, it could provide a real increase. We had these arguments at the beginning of the last Parliament. When I quoted the cash figures, people said it would amount to a real decline, yet we have had a real increase, with the last two years seeing real increases in total general public spending, as I indicated in a recent intervention and as this Red Book makes very clear. If the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) reads it he will see the real increases in general Government current spending over the last couple of years. Those have been affordable and the lower rate of inflation is helping.
If we look at public spending as a percentage of GDP, we see that, yes, it will fall, but that is extremely good news, because it means people will be able to keep more of the money they earn from their productive activities and as the economy is growing we can have better public services.
One of the cruellest myths being put around by the Opposition at the moment is that if we took public spending to 35% of GDP, we would be cutting it to 1930s levels. That is complete nonsense: for most of the 1930s, public spending as a percentage of GDP was well below 35% in any case, but I recently looked at the numbers and found that, in real terms, public spending this year is nine times the level of real public spending in the early 1930s—nine times in real terms.
Mr Newmark
It is statistically worth pointing out that the direction in which we are heading is towards 35.2% of GDP, but that when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was Chancellor he was spending about 35.8% or 35.9% of GDP. There is not a huge difference between where we are going and where he was.
Mr Redwood
To make the point, the Chancellor has said that he will spend a little bit more in the last year of the period so that we reach exactly the percentage of GDP that Labour thought appropriate in 2000. We cannot say that because we are spending the same percentage of GDP we have cut spending or that it is down in real terms. If we have a healthy, growing economy, public spending is well up in real terms, as is the general size of the economy. We should welcome that. What we want is growth in the economy, so that we can have affordable growth in the range and quality of public services. That is exactly what this illustrates. I hope that Labour Members will stop trying to con people into believing that if we ended up with 35% of GDP—1% lower than the Chancellor intends—we would somehow have 1930s levels of public services. It is so absurd that I cannot believe that they even dare to repeat such nonsense day by day.
What we want from this Budget, and what I think it helps to deliver, is more growth. It is great news that we now have such good employment figures, which show record highs. It is good news that unemployment is reducing and good news that youth unemployment in particular is reducing.
What has happened over these five years is quite remarkable if we consider two important background points. The first is the state of the banks inherited in 2010. This House has never really understood or grappled with the magnitude of what happened to the banking system under Labour, or the magnitude of the changes between 2008 and today, particularly with respect to RBS and HBOS. If we had asked most economic forecasters what would happen to the UK economy if we took about £1 trillion of assets off the balance sheets of two leading banks, they would probably have forecast that the economy would crash in a remarkable way. What is fantastic for our country is that after the initial crash over which Labour presided in 2008-09, we have managed to get the economy back to growth while mending the banks and going through the extraordinary shrinking on the banking balance sheets. [Interruption.]
I find it remarkable that Labour Members will not listen to what I am saying. They lived through this dreadful experience and their regulators allowed the banks to over-expand their balance sheets, when many of us were saying that it was going too far. [Interruption.] Indeed, we did. We constantly said that regulation was too lax. I remember writing in the report of the economic policy review undertaken by the Conservative Opposition that, while in some areas there was far too much regulation, the regulation of the things that really mattered—cash and capital—was far too lax, and needed to be tightened. However, the Labour Government and their regulators then made the worse mistake of over-tightening in a hurry, and precipitated a major crash. Labour needs to learn from that. Indeed, we all need to learn from it, because we do not want it to happen again. We need to understand why there was such a big crash in output and in people’s living standards and real incomes, and why it took time, between 2008 and 2013, for growth to resume. The reason was that the banking system was so badly damaged that, obviously, it took time to get it back into shape.
As the Chancellor said himself, there was another reason for our problems. In 2011 there was an extremely unpleasant euro crisis, which had an impact on Britain because we live by foreign trade as well as by our domestic activities. We had to shelter ourselves from the worst of that. We are now in the process of orientating our trade much more strongly towards Asia and the Americas, the growing parts of the world, and away from the European area, which is mired in recession and is still experiencing enormous difficulties. It decided to create a single currency without creating a single country to back it and love it, and is having to live with awful strains and stresses as a result.
As we meet today, this Budget is an important event. It is certainly a very important event politically in the United Kingdom. However, a far more important set of events is taking place on the continent, where hectic negotiations are taking place between Greece, Germany and the rest over whether Greece can stay in the euro. It is not easy to see a happy outcome in either direction from those very pained discussions, but are we not glad that we are not having to live with that awful experience in this country, thanks to some of us who urged very strongly that we should stay out of the euro? [Interruption.]
The hon. Member for Bishop Auckland (Helen Goodman) thinks it is funny that Greece has a youth unemployment rate of 50%, but I do not. I think it is a disgrace. I also do not think it is funny that several countries on the continent have a general unemployment rate of 25%. That is quite unacceptable, and the Labour party would rightly condemn it every day of the week if it were happening here, but it is not happening here because we ran our own economic policy, and we have done a much better job that they did on the continent.
Mr Brooks Newmark (Braintree) (Con)
I am delighted to follow the hon. Member for East Antrim (Sammy Wilson), who is a powerful advocate for his region of the United Kingdom. He raised many important points. It has not been a balanced recovery; he is absolutely right. The south has done a little bit better than perhaps Northern Ireland and some of the areas of the north. However, as the Chancellor pointed out during his speech, recoveries are never linear. Sometimes some regions grow faster than others. Sometimes we get recoveries that are slow and then there is a U-bend and suddenly the recovery accelerates a little more. I suspect that what we are seeing now is a little bit of the J-curve—we have had a much slower recovery than we expected, but it is now moving much faster, as we have seen from the Red Book.
Damian Collins (Folkestone and Hythe) (Con)
I wanted to intervene on the hon. Member for East Antrim (Sammy Wilson) but he was reaching his conclusion. Is it not a cause for positive reflection that job creation in Northern Ireland at the end of last year was growing at its fastest rate for more than 20 years? That shows that there has been growth throughout the United Kingdom.
Mr Newmark
My hon. Friend and the hon. Member for East Antrim are both right. The hon. Gentleman’s point was that at the beginning things were a little slower than he would have liked for his constituents, but as he said—this is my point—recoveries are never linear. In the past five years, we have seen slower growth than we would have liked, but we have far more accelerated growth through 2014-15, and certainly beyond to 2016-17 and 2018-19. That is good news.
In 2010, in Labour’s great recession, we faced economic meltdown. As UK plc, we were literally teetering on the brink of bankruptcy. What we needed at that time was an emergency Budget. The Chancellor, working with our coalition partners—I give credit to the Lib Dems—came up with a long-term economic plan. In producing that long-term economic plan, we had to deal with one important issue: the structural deficit. The deficit, which was running at roughly 10.2% of GDP, needed to be dealt with. We particularly needed to deal not just with the general deficit but with the structural deficit, which was an enormous problem in terms of our ability to achieve sustainable borrowing.
That was the challenge posed by the right hon. Member for Wentworth and Dearne (John Healey). He wanted an unsustainable deficit of 10%-plus. Perhaps he meant 12%; perhaps he wanted more borrowing. I do not know what direction of travel he would have liked to take, but if we had gone in that direction, we would have been in France’s position today.
Dr William McCrea (South Antrim) (DUP)
Does the hon. Gentleman accept that in Northern Ireland the construction industry is still having difficulties? Many of our major construction companies and the people working for them are having to come to the mainland to get contracts rather than staying in Northern Ireland. We need to encourage that industry.
Mr Newmark
The hon. Gentleman makes a good point. In introducing things such as the increased investment allowance—it was £25,000 and went up to £250,000—the Government have done a lot to help to turbo-charge investment. I shall come to the rate of investment and investment growth a little later in my speech.
The important thing was that we dealt with the deficit up front and brought it down by more than 50%. It is now trailing at around 5%. Do we have further to go? Absolutely, but bringing it down from 10.2% was very important.
The important thing about bringing down the deficit and dealing with the structural deficit was bringing back market confidence. Doing so allowed us to maintain low interest rates. Confidence means low interest rates. It is not just a matter of the Bank of England’s confidence in setting them—there is a worldwide market out there. Low interest rates mean low mortgage rates and low business rates for small businesses. All those things were important in helping to create growth in the UK.
John Healey
When the hon. Gentleman intervened during my speech, I made it clear that the deficit was caused after the global financial crisis by the Government stepping in to help the country through. That is what Governments can do. I said clearly that that caused the deficit and we had to deal with it. Any Government would have done so. What counts is how they deal with it. Will he remind us what Labour’s plan in the 2010 election was, as set out by my right hon. Friend the Member for Edinburgh South West (Mr Darling), the Chancellor at the time? Our plan would have reduced the deficit faster and further than the Chancellor has managed in the past five years.
Mr Newmark
I do not want to use the expression ceteris paribus—all things being equal—but the Chancellor at that time was probably right. Unfortunately, he too would have faced a euro crisis, and things would have been very different from what he originally projected, just as things were different for my right hon. Friend the Chancellor when he made his original prediction.
Mr Newmark
I am trying to stick to Mr Deputy Speaker’s instruction to keep roughly to 10 minutes.
Time and again, Labour Members talk about borrowing. Page 22 of the Red Book shows us that public sector net borrowing is coming down annually. That is the point. Labour Members look at the gross figure, but the important thing is that we are bringing borrowing down annually. In 2015, it will go down to £90 billion. It will then go down to £75 billion next year. Hopefully, by 2018-19 we shall be in some sort of surplus.
It is also important to look at cyclically adjusted net borrowing, which is also decreasing—we will be showing a surplus in 2018-19. The borrowing figure has been and is a problem. Are Opposition Members right to point out that the gross figure is growing? Absolutely. The point is that we are tackling the deficit to bring down the annual amount of borrowing. That is what the Government have done very well.
Mr Newmark
No, I am not giving way.
I talked about the J-curve. Growth was slower to begin with, but the OBR is forecasting that growth will be much faster than originally predicted. In 2015, GDP growth goes to 2.5%. In 2016, it goes up another 2.3%, and 2.3% beyond that.
It is important to note, as the Chancellor did, that we have rebalanced growth—we have growth in the north as well as in the south. Has the north faced more pain than the south? Absolutely. The facts are there. The important thing is that we are now seeing balanced growth. The service sector is growing hugely, but the manufacturing sector is growing equally fast.
The OBR forecasts business investment growth—this is important—of 5.1% in 2015 and 7.5% in 2016. Hopefully, some of that will benefit Northern Ireland, to support what the hon. Member for East Antrim said.
The critical thing about growth is unemployment and employment. Unemployment has decreased from 7.8% to 5.7%. That has happened much faster than the Governor of the Bank of England projected when I sat on the Treasury Committee. Most importantly, for my constituents unemployment has dropped from 3.7% to 1.5%, and youth unemployment has dropped from 5.4% to 2.6%.
We have a record number of people in work: 30.9 million people in work is a remarkable figure, but even more remarkably, more men and more women are in work than ever before. Some 1.85 million new jobs have been created. I started the Million Jobs campaign to try to address the problem of youth unemployment. I was delighted that the Chancellor took our recommendation to abolish the jobs tax for young people. The Million Jobs campaign supported the abolition of national insurance for under-21s, which will kick in this year. I hope that one year the Chancellor will extend it to 24-year-olds. We are already beginning to see the benefits for the under-21s.
On taxation, I never imagined that we would do this—I thought at the time that it would be costly—but the personal allowance has gone from £6,500 to £10,600. That has meant that we have been able to benefit the average family to the tune of something like £905 per taxpayer. That is good news for taxpayers. Increasing the personal allowance to £12,500 in the next Parliament is a great ambition: it would take something like 4 million people out of tax altogether.
Raising the minimum wage from £6.70 to £8 an hour is another good and important move, because it stops the state subsidising the private sector, which is what has been happening as a result of a very low minimum wage. Raising the minimum wage will ultimately benefit taxpayers overall and ensure that businesses take on the responsibility to pay their own employees a fair wage.
On business tax, corporation tax coming down from 28% to 20% has not only encouraged people to set up businesses, but encouraged businesses to come across from continental Europe and set up in the United Kingdom. We now have the lowest corporation tax rate in the G8.
I have mentioned the abolition of national insurance for young people. It is also good news that the employment allowance is saving about £2,000 per business, because it encourages small businesses in particular, which live on the margin, to perhaps take on an extra one or two people.
The freezing of fuel duty has also benefited almost all our taxpayers: my constituents save about £10 every time they fill up their cars. Energy costs coming down will benefit the elderly in particular, so it is all good news on that front.
Most importantly—Opposition Members have been making this point for a while—when inflation was running higher than pay, people were in effect losing money; the ordinary, average earner was suffering. Now, however, pay is up about 2.1% and inflation at 0.9%, so real pay is going up.
As an ex-charities Minister, I am particularly pleased that an extra £75 million will be available for charities from the LIBOR fines. I certainly pushed for that and wrote to the Chancellor asking for support for Essex Air Ambulance, which is based in my constituency. I am delighted that the Budget will provide support from the extra LIBOR fine money for Essex Air Ambulance, because that means it will be able to provide an emergency support service 24 hours a day, seven days a week.
The Labour party was financially reckless in government, but its promises in opposition seem to be even more so. It has promised something like £20.7 billion in unfunded commitments, which is something like an extra £1,200 per household. Labour is indeed the party of tax and spend and borrowing. It has not changed and, if elected, it would still not change and it would damage this country.
What would a future Conservative Government do? They would be committed to raising the personal allowance to £12,500 by 2020; cutting tax for 30 million people; taking 1 million more people out of tax altogether by raising the personal allowance; balancing the books beyond the next Parliament; and reducing Government spending to 35.2% of GDP.
In conclusion, the Chancellor has delivered on his long-term economic plan. He has reduced spending, the deficit, taxes and unemployment. Compared with five years ago, he has also overseen reductions in inequality, child poverty and pensioner poverty and a smaller gender pay gap. In the words of Christine Lagarde, head of the International Monetary Fund,
“this is exactly the sort of result that we would like to see: more growth, less unemployment, a growth that is more inclusive, that is better shared, and a growth that is also sustainable and more balanced.”
This is a Budget that the Government can be proud of. The Government’s long-term economic plan is working, and we hope that on 7 May the electorate will not give the keys back to the guys who crashed the car.
Helen Goodman (Bishop Auckland) (Lab)
We heard a characteristically self-congratulatory speech from the Chancellor earlier today. According to him, his strategy is working and his early austerity is paying off, with a growing economy, rising employment, a falling deficit and even enough room for manoeuvre for a few more tax cuts. Let us take each claim in turn.
This has been the slowest recovery from a recession ever recorded. The economy was growing when Labour left office in 2010. The Chancellor slammed on the brakes. The OBR estimates that the economic loss was 2% of GDP in the first two years; a professor of economics at Oxford university estimates it at 5%. That is £1,500 for every man, woman and child.
It is true, of course, that employment is now rising, but not as much as Government Members claim. The JSA claimant count is down to 800,000 but the figure on the International Labour Organisation’s unemployment measure is 1.8 million and the rate varies among particular groups. In the north-east it is 8%, while for young people it is 16%, and, as other colleagues have said, many jobs are zero hours and low paid. Average earnings have fallen. They are not forecast to reach pre-recession levels until 2020, fully 12 years later.
Poverty is up and earnings are down, the consequence of which is that tax revenues have been weak, so the Chancellor of the Exchequer’s deficit and debt reduction targets have both been missed. The deficit is down by a third, not eradicated as planned. Debt is up by a third and £200 billion more has been borrowed than was planned. Living standards have fallen and inflation is below target, verging on the negative, while interest rates have never been lower and are negative in real terms.
None of that suggests that the economy needs to be reined in or that there is spare capacity, yet the Chancellor is planning to go into the next general election with a plan to cut both tax and spending. The Red Book shows a 5% reduction in GDP—between £60 billion and £70 billion of cuts. The OBR analysis also shows huge reductions in the first two years—indeed, bigger than those we have seen in the last five. Obviously that will further deflate the economy. Even the Financial Times this week was describing it as “unnecessarily extreme”.
What the economy needs is continued growth and measures to boost productivity, which fell last year and has stalled in the last six. Productivity in Britain is now lower than it is in the United States, Germany, France and Italy. Higher productivity would mean higher wages and make our exports more competitive, which would be especially useful at the moment, when the pound is rising against the euro. According to the OBR, higher productivity would also mean higher growth and lower debt. Indeed, the OBR’s scenarios show a massive difference in the debt-to-GDP ratio, of 50% to 57%, compared with 87%. The OBR describes the productivity performance in this country over the last five years as disappointing.
In other words, what this Budget should have contained was measures to boost productivity, which would have improved the public finances—measures such as better access to finance for SMEs, through a British investment bank; maintaining and improving the skills of the labour force, through a young person’s job guarantee, better vocational education and cuts to tuition fees; substantial improvements to the nation’s infrastructure; and devolving economic power and funding to city and county regions.
Mr Newmark
I will buy the hon. Lady an extra minute, because I can see that she has got a thick wodge. She is one of the more economically literate Members on the Opposition Benches and she has made a number of proposals, so I wonder how she proposes to pay for all those things. Is it more tax, more borrowing or a higher deficit?
Helen Goodman
The whole point about the plans that we are putting to the British people is that we think it is reasonable to borrow for investment, in the same way that people borrow to buy a house. We think that is a sensible proposal for the nation as a whole. It would build capacity and mean that everybody had a higher standard of living, that we had faster growth and that revenues were higher, and in the end the deficit would come down.
Today, there is no new money for infrastructure. The Chancellor spoke about it a lot, but he was simply elaborating on the plans he put before the House in the autumn statement. There is no new money for science, for SMEs, for transport or for broadband.
The Chancellor proposed changes to personal tax allowances that will benefit people on higher incomes far more substantially than they will benefit those on lower incomes. A person earning under £10,000 a year will get no benefit. A person earning between £11,000 and £43,000 will benefit to the tune of £80, or by as little as £20 if they are on housing benefit or tax credits, because those benefits will be withdrawn. The biggest benefit of the increased tax allowance will go to people earning between £43,000 and £100,000. They will get £160 in their back pockets.
The Government propose significant changes to the savings and pensions tax regimes that will cost £1.7 billion. I put it to hon. Members that it might be nice for people to save and nice to have a better tax regime for a small number of people, but when our economy is in such a weak state, they can hardly be a priority on which it is appropriate to spend £1.7 billion. That will obviously benefit the better-off people in this country as opposed to the vast majority of people.
My right hon. Friend the Member for Tottenham (Mr Lammy) comprehensively demolished the Government’s help-to-buy proposals. It is absolutely absurd to keep pumping money into the housing bubble in the south-east and not to do something about the underlying problem. Building homes would tackle the housing crisis, create jobs and boost the economy. In my constituency last year, not a single property was exchanged for £600,000, which is the Government’s limit in their Help to Buy scheme. That epitomises all that is wrong with the Government and how totally out of touch they are.
Furthermore, I believe that the Budget is dishonest. It tells only half the story. It does not set out where a further £9 billion cuts in welfare would be found; it does not say what the rate of VAT will be after the election; it does not say how big cuts would be to defence, police and local government; and it does not say whether charges will be needed in the NHS.
I do not believe that the British people want a fundamental re-imagining of the state. They want something simple: a better future with a Labour Government.
Infrastructure Bill [Lords]
Brooks Newmark Excerpts(9 years, 5 months ago)
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Roberta Blackman-Woods
The hon. Gentleman makes a very good point. I am tempted to add park and ride to the long list of items omitted from the Bill that hon. Members have mentioned.
Mr Brooks Newmark (Braintree) (Con)
The hon. Lady is taking a glass half-empty rather than a glass half-full approach. The Government are making a number of long-term commitments for improving the infrastructure of this country. Will she at least say that she will abide by those commitments should she ever get into power?
Roberta Blackman-Woods
The hon. Gentleman will have to wait to hear what I will say about the range of provisions in the Bill.
More alarmingly, the Bill could make things worse by diverting expenditure from the road network used by 67% of traffic. These are the very roads that need urgent attention in terms of the £12 billion funding black hole for potholes, not to mention measures to reduce congestion. Most tellingly, all this means that 91% of the public are dissatisfied with the state of the roads, which the Government surely need to address.
I am going to come on to the planning measures—or rather, the lack of them—in a minute, but it is obvious to everyone except this Government that meeting our infrastructure needs requires joined-up planning between strategic and local networks. That is the sort of devolution of powers that Labour is proposing—giving powers to local authorities, either singly or in combination, so that they can plan for the needs of the area—but we see no joined-up thinking coming from this Government. All the Bill does is to propose minor changes to the national infrastructure planning regime to allow two inspectors to sit on the panel of an examining authority and to allow the Secretary of State to make changes to development consent orders once they are made.
A recent report by the London School of Economics—one of the many recent reports on this topic—argues for a new approach to infrastructure in this country. Labour has grasped that, which is why we set up the Armitt review to look at how we should approach the planning and delivery of national infrastructure projects. Armitt accepts much of the Planning Act 2008, but argues for an independent national infrastructure commission and cross-party agreement to prevent the start-stop regime that is often experienced by major infrastructure projects. To tackle that, we shall table amendments in Committee to try to persuade the Government of the sense of adopting the Armitt proposals.
A120 (Colchester)
Brooks Newmark Excerpts(10 years, 11 months ago)
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Mr Bernard Jenkin (Harwich and North Essex) (Con)
I am extremely grateful for the opportunity to debate this issue and I thank the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), for being present to reply.
The A120 is a major economic artery in north Essex. Its route follows the old Roman road of Stane street from Standon in Hertfordshire, through Colchester and on to Harwich. Today, it is the vital trunk route from the M11 and Stansted airport to the port of Harwich. Its importance nationally, regionally and locally was recognised when the Department for Transport published a route-based strategy for the A12 and the A120 earlier this year. The route supports the national and regional economy by providing the link from London and the south-east to the ports of Harwich and Felixstowe and on to Europe. Locally, it is used as a commuter route, serving the growing towns of Chelmsford, Colchester and Ipswich.
The road will be functioning above capacity by 2021, and will struggle to keep up with demand if the large amount of growth proposed for the towns and cities along it is built. A significant level of growth is planned along the route in terms of jobs and houses. The key areas are around Chelmsford and Colchester, but the port of Harwich is also expected to expand.
Despite all that, the A120 is not designated as part of the core network, which prevents the road from qualifying for access to the £13 billion pot of funding in the European Union’s trans-European network fund—if we are going to pay into it, we may as well get our money out of it. There is no excuse for that; it is the only road in the UK connecting a major port to a major airport.
Improvements to the road were the subject of a section 106 agreement that was included in the Bathside bay planning application for the development of a five-berth container port at the Harwich International port. The development, however, is on hold due to the downturn in world trade, so the improvements suggested in the section 106 agreement, which would have addressed the failings I am about to discuss, will not happen in the foreseeable future. Improvements cannot be left any longer, and certainly cannot remain dependent on future developments and planning applications.
The key safety concerns must be addressed. In particular, the stretch spanning the three junctions of Harwich Road, Pellens Corner and Park Road is extremely dangerous. At each of the junctions, traffic turning right must cross the central reservation and oncoming traffic, which is travelling at the national speed limit of 70 mph. The geography—the ground rises, and there is a bend towards the Pellens Corner junction—makes it extremely difficult to judge the speed of oncoming traffic. Derek Hambling, the manager of local bus company Cedric Coaches, whose drivers use the junction every day, comments:
“I have seen many near misses where cars have been edging out to see past my bus as I wait to turn right towards Elmstead and have made traffic on the A120 swerve to miss them.”
Following a spate of accidents, works were carried out in February and April 2012 with the aim of making those junctions safe—I am grateful to the Highways Agency for its efforts. The overwhelming response from members of the public who use the junctions, however, was that the changes did not make the junctions any safer. In fact, drivers found that the new road markings made the junctions harder to navigate and even more dangerous. I speak from my own experience, because it is possible to lose the sense of where one is in the junction on a dark and rainy night, even if only driving down the A120.
Mr Brooks Newmark (Braintree) (Con)
I am listening to my hon. Friend with great interest, in particular as he discusses accidents that can happen. The focus of his interest is the eastern section of the A120, but, west of there and still on the A120, between Braintree and Marks Tey, there are two other accident points. One is at the turning of Bradwell village, where I live, where numerous accidents happen, and a bit further along at the junction between—
Mr Newmark
Does my hon. Friend agree that more investment is needed on the A120 west of Colchester as well as east of it?
Mr Jenkin
The three junctions I mentioned raise questions about the safety management of many similar junctions on the trunk road and motorway network: are they given sufficient priority? If as many injuries occurred on the railways or in the aviation industry as occur on our roads, far more money would be spent on that, and a far higher priority would be given to it than is given to these accident black spots. That is the point that I think my hon. Friend wants me to make about the junctions he discussed.
Fortunately, we have not had any fatalities at the three junctions since the works were completed—perhaps that is a benefit of the changes—but there has been a steady stream of serious collisions, often resulting in severe injuries, proving that that stretch of road remains extremely unsafe. We have been lucky. During the 12 months since the junctions were improved, there have been 10 incidents, nearly seven times the accident rate that would be expected statistically speaking. Prior to the junction improvements, the accident rate was 6.3 per 12 months, or 4.6 times the average expected statistically. The junctions were already dangerous, and may now be even more dangerous. Those figures again bear out Derek Hambling’s observation:
“It is much more dangerous than it was before the changes.”
The Highways Agency accepts that more needs to be done to improve safety on this stretch of the A120, and I am extremely grateful for its responsiveness. However, it carried out a further safety audit which gave rise to its proposal to close the gaps in the central reservation so that drivers would no longer be able to turn right off the A120 across the path of the oncoming traffic. That will stop accidents at the location, but it is not a practical or safe solution.
First, it will significantly increase many local journey times, including those for emergency vehicles responding to call-outs. Scheduled public bus services will be affected, and adding half an hour to a local bus journey is not unforeseen. There is no doubt that it will damage the local economy. Nigel Dyson, vice-chairman of Little Bentley parish council, commented:
“Since 2005 we have been fighting to stop the deaths on the A120 and get a solution”
but
“we are really no closer to doing this, and just to plunge our villages into chaos is not the solution.”
We must be mindful of the problems that that would cause for local businesses. Steve Wilcox, chairman of Little Bromley parish council, pointed out:
“The impact on local businesses will be significant. There are a number of businesses in Little Bromley”—
and in other villages—
“which operate on small margins, relying on deliveries or visiting trade. The pub trade, which is already struggling, would be dealt a serious blow putting them at risk in the village and the surrounding areas…The closure of these crossovers will affect a great many communities within Tendring, particularly the small rural ones struggling to thrive. Communities as far away as Clacton, Walton, Frinton and Harwich will also be affected.”
A local pub landlord told me:
“The closure of the access from the A120 to Little Bromley from Harwich, Clacton and surrounding villages will have a devastating effect on the future of the pub. As well as being a locals’ pub over 50% of our customers currently travel from these areas.”
That closure will put traffic back on to local back roads, with the attendant safety risks, and this is the point I want to concentrate on. One local couple said:
“There have been too many injuries and too many deaths over the past ten years, please do not relocate these accident black spots on to our country lanes.”
Many of the back roads and country lanes are very narrow and totally unsuited to a volume of commuter or bus traffic.
A long-term solution is needed. Ideally, it will include a roundabout to cater for two junctions, and closure of the third junction. This proposal is supported by Cedric Coaches, and the Highways Agency describes it as
“a viable long term option”.
However, the money must be found. There is an economic case for it at local and regional levels, given the importance of the road and the junctions to the local economy; but most importantly there is a strong case based on the improved safety that it would bring to the junctions, which they have lacked for so long.
In the meantime, interim measures are needed. The preservation of life and avoidance of more accidents is paramount. I recognise the pressure on the Highways Agency to act, but I share the overwhelming view expressed by local residents that closing the gaps in the central reservation cannot be the long-term solution. Peter Halliday, leader of Tendring district council, states:
“Whilst we acknowledge the safety issues that present themselves to road users at these junctions, the compounding of rural isolation their closure would cause is unacceptable for our district. In particular those residents and businesses that rely on two way access onto the A120 and those that simply need to cross the road to go about their daily routine. We simply cannot understand why, as is the case in other locations, speed reduction measures can’t be put in place to reduce the regularity and severity of collisions and free unfettered access to the major trunk road be maintained.”
HGV Road User Levy Bill (Ways and Means)
Brooks Newmark Excerpts(11 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Brooks Newmark (Braintree) (Con)
Like everyone else in the Chamber, I think that the HGV Road User Levy Bill is extremely welcome. Like the hon. Member for Dundee East (Stewart Hosie), I had not intended to speak, but then something rang in my brain, as I have many road hauliers in my constituency and I thought I would speak up for them. With regard to his comment about the brevity of the Minister’s introductory comments, it is clear that the Bill is so compelling that he needed only a minute to introduce it.
There are two key arguments I have heard from many independent operators as well as larger hauliers, such as the Prince group, in my constituency: the equity argument, which was raised by my hon. Friend the Member for Spelthorne (Kwasi Kwarteng); and the economic argument, which was raised by my hon. Friends the Members for Milton Keynes South (Iain Stewart), for High Peak (Andrew Bingham) and for North West Leicestershire (Andrew Bridgen). The equity argument is an important one that all road hauliers make, which is that it is simply unfair that road hauliers can come here from overseas and use our country’s roads but contribute nothing whatsoever to maintaining them. The Bill goes at least some way towards redressing that imbalance.
In these tough economic times there is also the economic argument. It is unfair that our road hauliers face such marginal costs, especially given the high price of fuel, so trying to equalise what foreign users pay for using our roads will create a little more equilibrium and will not give them the extra marginal cost advantage they have in these tough economic times. Given the equity argument and the economic argument, I wholly endorse the Bill.
Now that the Minister is in his place, I would like to thank him for the financial support he recently gave for the A120, which will help unclog the roads even if they are used by road hauliers.
Stephen Hammond
That is an important question, and my hon. Friend is right to say that it has not been raised so far. The Department estimates that somewhere between £18.7 million and £23.1 million will be raised at current prices, but I am sure that as the years go by, that sum will increase.
I believe I have comprehensively reviewed my colleagues’ contributions—
Mr Deputy Speaker
The hon. Gentleman has used his intervention up, but I will let him have another go. [Laughter.]
Mr Newmark
Hon. Members have articulated the views of the road haulage industry in their respective constituencies. Will the Minister spend a couple of minutes going into a little more detail on the consultation he had with the industry and on its input, and explain why the Bill is the silver bullet that will make the road haulage industry in the UK happy?
Stephen Hammond
I would like to tell my hon. Friend the dates, places and times of the meetings, but unfortunately the excellent preparatory work on the Bill was done prior to my time in this role—it was done by the current Minister of State, Northern Ireland Office and officials when he was an Under-Secretary of State for Transport. As I have said, an extensive consultation took place and has been published. The measure received widespread support, albeit with a number of questions on how the scheme might work and be implemented, which has been reflected in the debate—a number of the questions were similar to those raised by road hauliers.
However, I am delighted that we have reached the stage we have reached today. The Bill is widely recognised in the House as a welcome measure for UK hauliers and UK industry. All hon. Members have welcomed it. I recognise that this is a slightly unusual way to introduce legislation, but it has enabled us to have an extensive and inquisitive debate.