Budget Resolutions and Economic Situation

Guy Opperman Excerpts

Thursday 24th June 2010 Commons Chamber

[Clive Efford]

I assume that the hon. Gentleman has applied to speak in the debate, but it is clear that I have touched a raw nerve with him.

It is as sure as night follows day that those who support this Budget will want to cut the NHS next. Attacks on what has been describe as an “over-bloated” public sector are attempts to soften the public up in preparation for an unprecedented attack on public sector workers and the people who rely on the services that they provide.

The public sector will be hit in three ways, with a triple whammy—a freeze on council tax, a freeze on pay, and a squeeze on workers’ pensions. The claim that none of those would be necessary if the previous Government had not left the country in the state that the present Government say that they did just does not stand up to scrutiny.

In this Budget we are being asked to vote for taking away £1.8 billion from housing benefit, £1.4 million from disability benefits, £11 billion from the welfare state overall—and £2 billion from the banks. The Government say that they oppose nationalisation, but they have certainly nationalised the cost of the banking failure, and it is the poorest people in our constituencies who will pay the price.

The figures show that £1 in every £7 spent by the poorest 10% in our communities goes on VAT, but that drops to £1 in every £25 for the richest 10%. The IFS has confirmed that Labour’s plans would hardly have touched the poorest 10% at all, but this Budget will reduce their income by 2.5%. Labour’s proposals would have reduced the position of the richest 10% by 7%, but the Budget adds only a further 0.6% of that.

[Guy Opperman (Hexham) (Con)]

Will the hon. Gentleman give way?

[Clive Efford]

No. I have given way twice, and other Members wish to speak.

We can see who is paying the price for the Budget. The Government say that we are all in this together, but some of us are in it more than others, and the poorest are in it up to their ears.

There is no mandate for this Tory Budget. Despite all the coverage that we have read about it, no one has said, “Thank God the Liberal Democrats were there to hold back the nasty Tories.” Everyone says that it is a Conservative Budget—the Budget that the Conservatives would have introduced whether or not they had the rag, tag and bobtail of the Liberal Democrats tagging along behind them. This assault on our public services is founded on the misguided belief that as the pubic sector contracts, the private sector will expand and provide new jobs.

There is no intention of returning investment to the public sector. The dogma that drives the cuts is the same that drove the Tories to attempt to destroy the NHS when they were last in power. Anyone who votes for the Budget is signing up to a Thatcherite philosophy of slashing the public sector and paying no heed to the consequences for the most vulnerable people in our communities. Never again will the Liberal Democrats be able to claim that they are the party that stands up for the underprivileged and a party that is in favour of intervention. This is a Thatcherite Budget and anyone who votes for it will be a Thatcherite: Members on the Government side of the House are all Thatcherites now.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

I remind the House that I have declared a previous involvement in manufacturing through my family firm.

Before I talk about the Budget, I wish to say something about the maiden speeches that we have heard. We heard an excellent maiden speech from my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). Her seat is similar to my Northumberland constituency, and she spoke eloquently about the contribution that can be made by tourism and farming, which I look forward to championing with her. My hon. Friend the Member for Hendon (Mr Offord) also spoke well, and the hon. Member for Kingston upon Hull East (Karl Turner) was a great deal more articulate than his predecessor in the House. My hon. Friend the Member for Camborne and Redruth (George Eustice) said that his family lived in his constituency 400 years ago. The constituency was also the home of Ross Poldark, who found fame and fortune in the novels, and I am sure that my hon. Friend will have a similarly colourful career.

It gives me no pleasure—to a certain degree I endorse what was said by the hon. Member for Streatham (Mr Umunna) on that subject—to speak in a Budget debate when we all face such difficult circumstances. Unemployment has increased considerably in the four Northumberland constituencies. It has increased by nearly 60% over the past five years in the two Labour-held constituencies of Blyth Valley and Wansbeck, and by a similar amount in Berwick-upon-Tweed. Unemployment in Hexham has increased by 67% in the past five years.

I have heard much of what Labour Members have said in today’s debate, but this is not a question of ideology. We are not Thatcher’s children producing Thatcherite views. I assure Labour Members that I did not join the Conservative party until considerably after Mrs Thatcher left office, and I am not in a position in which I want to put forward such a point of view. The ideology behind what we are trying to do to put things right is a simple question of maths. We have outgoings of £700 billion and incomings of £545 billion. Those figures are unquestionable; the issue is how we address the situation.

My ideology arises from the fact that my family came to this country nearly 100 years ago as immigrants with next to nothing. They had no opportunities, save what they could make. In the 1920s—when there was a real recession and things were really bad—my grandfather came home from school to be told by his father that school was no longer an option, and he would have to be withdrawn so that he could work for his father. The three children then began to work for their father in the basement of a small flat in Islington and built up a small manufacturing business on the back of a small gift of £40. I wish to say something about manufacturing. In 1997 we made roughly as much as we consumed in this country—about £160 billion, compared with £150 billion. Now, however, we consume nearly twice what we make.

In Northumberland apprenticeships are struggling. I visited Glendinning’s, a firm in my constituency, shortly before the election. I was told that the firm could not take up the Government’s apprenticeships, for the simple reason that they were so complex and so administratively difficult to implement that it was better off working outside the Government’s scheme and ignoring any Government money.

During the election I went round nearly all the stores in Wylam in my constituency and asked the owners what the effect would be if national insurance went up. Every single one said that if it was increased, they would have to put people out of work.

There are many responses to the Budget that we could discuss, but there has been little from the Labour leadership. I have listened to the debates so far, and yesterday I listened to the hon. Member for Harrow West (Mr Thomas), who uttered not one word about what he would do differently. It is all very well saying that the Labour Government were going to cut the deficit by 50% in a number of years—but surely the question is what would they cut, and what would they do differently? The answer to that is fundamentally lacking from the Opposition’s arguments. It is a bit like watching the French football team: everything is wrong, but they have no alternatives.

I have also read in detail the speeches of the shadow Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), and the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who spoke on Tuesday. The only features of which she spoke in support were the capital gains tax measure, the 50p tax and the bank levy.

Earlier today, to support his argument, the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) quoted the right hon. John Smith saying, “I judge a Budget on what happens to a person living on a council estate.” We have a number of council estates in my constituency, and during the election we constantly articulated the view that to spend £400 a week while making only £300 a week is to head for financial disaster. Everyone can understand that.

We have heard a lot in our debates in the House about various organisations’ comments on the Budget. I represent a north-east constituency. The North East Chamber of Commerce, an august body which represents more than 4,000 businesses and more than 30% of the region’s work force, says:

“The Budget clearly contained a number of painful measures on…taxation and spending. However… Funding for a strategic economic development body in the North East was maintained”.

The NECC continues:

“Reductions in employer National Insurance (NI) contributions and headline Corporation Tax are welcomed by businesses, as is the extra exemption on NI in certain regions”.

It says:

“The Chancellor was right to avoid further capital spending cuts and to confirm spending on the Tyne and Wear Metro”.

The NECC goes on:

“The scale of the public finance deficit clearly required radical action… NECC believes the measures taken broadly support the wealth-creating part of the economy in the North East.”

It adds:

“Freezing public sector pay and reforms to pensions were difficult but necessary decisions to address the deficit and help reduce the need for large job cuts in the region’s public sector.”

The NECC welcomes—[Interruption.] Bless you. I welcome the hon. Member for Washington and Sunderland West (Mrs Hodgson), a fellow north-east Member, who is suffering from hay fever. I am happy to have accepted her intervention, brief though it was.

The NECC has also welcomed the increased thresholds for employer national insurance contributions and changes to the headline rate of corporation tax. The one criticism I put to Treasury Ministers is that, like the NECC, I find it

“disappointing to see no change to empty property rates, which we continue to see having a punitive effect”

on businesses, not only in the north-east, but throughout the country.

On capital spending, it is wonderful to see that the Tyne and Wear metro will go ahead, and that the A1 will finally see some form of action, which has long been supported by many hon. Members—albeit that the money still has to be found.

As I was sitting here this morning representing a fundamentally farming constituency during questions to the Department for Environment, Food and Rural Affairs, there was a brief sighting of an interesting and rarely seen—in the House for the past six weeks—individual, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). He is not normally seen at DEFRA questions, and like a small badger he nipped in and, alert to a possible cull, nipped out again very quickly, before any of us could question him in any way whatever, whether on DEFRA questions—not something that I necessarily think he would have been seeking to answer—or on Budget matters. It would have been wonderful to have had the opportunity to ask the former Prime Minister just what he had to say about the state of the budget. I would certainly have wanted to make the point that we are set to miss his golden rule by £485 billion—quite a significant miss, one might think. One thing is for sure: when he is brought to account in this House, he will have to answer for the state of the nation and the country’s finances. He may run, but he will never hide from that issue. He has much to account for, and we will ensure that he does so.

I finish by recommending a study of all the finances. Some aspects might be due to other factors, but most of what we now see happened on the watch of the previous Government. I recommend the Budget to the House.