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Mr. Evans:
I am sure that the House is aware of the work that my hon. Friend has done in that field. [ Laughter. ] I am sorry, that was unintentional; I was
being funny without meaning to be. Everyone knows what hard work my hon. Friend has done in that area, not just for his local dairy farmers but for dairy farmers throughout the United Kingdom.
A few months ago we saw the stealthy way in which the Chancellor operates, when he doubled the passenger air duty. I know that many in the House would say that that was an environmental measure. My hon. Friend the Member for Braintree (Mr. Newmark) asked about the effects of the taxes announced in the Budget, and I shall be interested to see what impact that measure has on people travelling. I take issue with the Chancellor on the way in which he introduced it. Those who had already booked and paid for their flight turned up at the airport and were told that they had to pay extra. It is one thing to announce a measure in advance so that everybody knows what taxation they will pay. It is quite another thing when people think they have bought and paid for their flight and then get clobbered with another duty at the airport. That is not fair.
Kitty Ussher: I know the hon. Gentleman’s constituency well, as it is next door to mine. As a result of the Budget, people living in the Ribble valley may find that there is greater potential to invest in microgeneration, as it is not an unwindy place. The hon. Gentleman questions the impact of the Budget on his constituents, so what is his view of the net benefit to his constituents of the additional grants for microgeneration and the possibility of mortgages for investing in installing microgeneration and reaping the financial rewards, as against the increased duty on 4x4s?
Mr. Evans: This will be an interesting one for me. I know that the hon. Lady knows my patch well. She will also know that many tourists come to the Ribble valley because of its unspoilt beauty. The area round the Trough of Bowland is wonderful. Do I want to see that littered with wind turbines? No, I do not. I am also president of the Country Guardians, and one of our duties is to ensure that the countryside is not scarred with industrial furniture.
I am a sceptic about some of the benefits claimed for wind turbines. I would much prefer the money that has been used to subsidise turbines to be invested in conservation. The Chancellor did some of that today, and I applaud him for it, although I wonder why we have to wait some time before VAT on energy-saving domestic appliances comes down to 5 per cent., yet he could introduce the nicotine VAT change straight away. I welcome the fact that he has introduced some measures on that front, but he could do a lot more, and sooner.
On energy generally, the energy review is trundling on. It is late and I do not understand why. If we want energy security and environmentally friendly energy production, let us get on with it and start the nuclear power building programme. I do not know why we are delaying. We know that it will happen at some stage, so let us just get on with it.
Lynne Jones (Birmingham, Selly Oak) (Lab):
Returning to the hon. Gentleman’s point about wind turbines, I share his cynicism about their contribution in urban areas, although I believe that wind could have great potential in larger schemes. On energy efficiency,
does he not realise that grants will be given only if the householder has already, for example, installed cavity wall insulation and loft insulation? His point about energy efficiency and conservation is not well made.
Mr. Evans: More can be done to incentivise people to conserve energy in their homes. If a small percentage of the money that goes towards subsidising wind turbines went straight into more grants to enable people to insulate homes and be more environmentally friendly, and perhaps give them all those wonderful energy-saving light bulbs, even though they cost a little more, we could conserve more energy than we need to create with those dreadful wind turbines.
As the hon. Member for Burnley (Kitty Ussher) knows my patch well, she will know that Ribble Valley’s council tax is going up by 5.1 per cent. this year. We do not know what to believe about inflation these days, as we have heard so many statistics, but I suspect that it is nearer to 5 per cent. than anything else. I heard the hon. Member for Dundee, East (Stewart Hosie) say that for some people, depending on what they buy, it is a lot higher, and could be nearer to 9 per cent. The increase for Lancashire county council—the hon. Member for Burnley will also have that element in her council tax—is 4.95 per cent.
At the same time, just to save money, the Government have cut back on rural buses, which goes against everything that I thought they were trying to achieve environmentally. Twenty-nine of our services are being chopped, which means that many people in rural areas will have no choice but to get into their cars and drive. For many of them it is not a reduction in the service—that happened a long time ago—but an abolition of the service. People are paying more in their council tax, yet having a poorer service as well. Moreover, the Lancashire police authority precept has gone up by 11.4 per cent. I would like to know exactly how every penny of that is being accounted for, because it is at least three times the rate of inflation.
The Chancellor altered stamp duty for carbon-free homes, but only until 2012. I do not know why he set that limit, because if it is such a good idea for all homes to be carbon-neutral, perhaps no sunset date should be put on it. He has done incredibly well out of stamp duty over the years. The Halifax bank has calculated that if the threshold had risen in line with inflation, the £250,000 threshold would now be nearer to £680,000 and the £500,000 threshold would be about £1,360,000. I hope that the Chancellor will reconsider that issue.
There is currently a campaign by nurses about pay. Doctors have done very well out of the Government, but is it not about time the nurses got their fair share for the work that they do? A 1.9 per cent. pay increase is simply insufficient when inflation is running at 5 per cent. One nurse wrote to me to say that she is losing about £570 because the pay increase is so low compared with all the other increases taking place.
Kitty Ussher: Does the hon. Gentleman not agree that as a result of the “Agenda for Change” process the average nurse’s pay is much higher now than it was under the Government whom he supported?
Mr. Evans:
What I do know is that nurses are so agitated about the level of pay that they are getting that
they are writing to every Member of Parliament about it. I am sure that the hon. Lady has received several postcards from nurses in her area complaining about the pay increase.
On pensions, there is an issue that has been a bugbear of mine for some time. I am sorry that we did not deal with it when we were in power, and I hope that the Government will consider it in the dying days of their Administration. If not, I hope that we will do something about it when we take over. Pensioners from the United Kingdom who have gone to live in certain countries abroad, such as Australia, Canada, Hong Kong, South Africa and New Zealand, have not had the pensions for which they have paid in uprated. Why not? The Government say that there are not reciprocal arrangements in several of those countries, but I do not understand how that comes about. If somebody from this country retires to another part of the European Union they will get their pension uprated straight away. There are all sorts of links with Commonwealth countries such as Australia and New Zealand, and people like to go and live in or retire to them. This problem affects 520,000 people who have moved to the countries that I mentioned, and I hope that Ministers will re-examine it. If the pensioner moved away from this country 20 years ago, one can only imagine what level of income they have to live on in those countries.
Rob Marris: When I last asked the Government to look into that, the annual cost of what the hon. Gentleman seeks came to £450 million a year. He spoke earlier about paying nurses more money, and I understand his point about vehicle excise duty on 4x4s used by farmers in his constituency, but he started out by talking about transparency and urging it on the Government. In the light of that transparency, will he tell the House what services he would cut, what taxes he would raise, or how much money he believes a Government should borrow, to fund the spending commitments that he urges on the House tonight?
Mr. Evans: I fully accept what the hon. Gentleman says, but when my hon. Friend the Member for Cities of London and Westminster (Mr. Field) was talking about spending, he invited the hon. Gentleman to think of examples of where money has been wasted, and a poor example was given, of some computer that may not have been necessary. The fact is that when the Government are spending something in the order of £685 billion a year, we are talking about substantial sums of money—and we all know about effective spending.
I recently attended a conference where Bill Gates was speaking, and when the richest man in the world speaks, I listen. He spoke about how much money he was giving to help eradicate HIV/AIDS in Africa. He always talked about the effective spending of money—not just spending, but effective spending. That is what the Government should be doing when they spend money. They do not have money of their own; they take it from us, as they have done in increasing amounts over the last 10 years. I want to see the Government properly and effectively spending that money. That is where the transparency lies.
We know that all sorts of computer schemes have cost billions, yet they have not even worked properly. We talk about the tax credit system, and we will all have had constituents in our surgeries complaining about tax credits being overpaid. They have been in touch with the organisation but they are still being paid the extra money, even though they have asked not to be paid it. Somehow or other, something in the system keeps paying the money. Then, of course, six months later, there is an attempt to get the money back, but it has already been spent. There are real problems there. That is where effective spending of money will come in.
I have two further points. The first is about spectrum, which the Chancellor mentioned. I do not know how much money he thinks he will get for the spectrum, but it will certainly not be anything like as much as when the 3G licences were first auctioned off, raising bumper sums in the region of £25 billion. I have one particular worry. If the entire spectrum is going to be auctioned off at the best price and none of it is to be allocated to the terrestrial channels, I am afraid that we could see an HDTV divide in this country, whereby high definition will appear on the Sky platform but not on freeview, which simply does not have the capacity. Attempting to put it on freeview would mean a reduction in the number of channels, which runs counter to providing choice. If that were attempted on freeview with the same number of channels, the picture would pixellate and freeze. I hope that we will look further into how spectrum will be allocated for those with terrestrial reception only, and, indeed, for theatres on radio mics, which I understand will also be affected.
I declare my interest as a retailer of tobacco and alcoholic products. I am also vice-chairman of the all-party beer group, so we are making our usual representations about alcohol, particularly beer. I know that spirits have been protected—I scratch my head and wonder why—as opposed to wines and beers. I know that the on-trade is finding it incredibly difficult, in comparison with supermarkets, which seem to be doing amazing deals for the public. I rather hoped that the Government would have been persuaded of the argument for a freeze on beer duty, particularly for on-sales, though it is difficult to differentiate.
Mr. Jeremy Browne: Every item that the hon. Gentleman has mentioned would cost more public money than the Chancellor announced in the Budget today. Is that why the Conservative party is now in favour of higher income tax than either the Liberal Democrats or the Labour party?
Mr. Evans: The hon. Gentleman clearly was not listening. We are in favour of the effective spending of the huge sums of money that are being raised from the public. One has only to open the public appointments section of The Guardian to see huge sums of money being offered for what I would term non-jobs. Huge savings could be made there. As I have said, the Government do not have any money of their own; they have only the money that they take from us in increasing amounts.
Huge amounts of beer and other alcoholic drinks are being smuggled in and sold in car parks, pubs and clubs all over the country. This affects not only the
businesses of those who live near Dover, but the Government’s tax take. The Chancellor has raised the duty on these products, yet they are also being smuggled in through the back door. By buying those smuggled products, people are stealing the taxes that would otherwise go into the national health service, education, or law and order, which is where we want to see money being spent effectively. Will any money be earmarked for bearing down further on people who smuggle products on which taxes are levied into the United Kingdom, whatever they happen to be? Such practices undermine the Government’s health and taxation priorities for this country.
5.46 pm
Kitty Ussher (Burnley) (Lab): I am grateful for the opportunity to speak in the debate, and it is of course a pleasure to follow my neighbour, the hon. Member for Ribble Valley (Mr. Evans), although I do not agree with everything that he says. I did not want to intervene on him for a third time, but I wondered what kind of jobs advertised in The Guardian he would define as non-jobs. He and I can, however, agree on one thing, which is that it is completely absurd that Lancashire county council should cut school bus transport. I have lobbied hard locally and nationally on that issue.
Mr. Jeremy Browne: I wonder whether the hon. Gentleman was referring to the large number of jobs in the office of the Leader of the Opposition that were advertised in The Guardian today, all of which are paid for by Short money from the taxpayer.
Kitty Ussher: I have not been looking for a job, so I did not notice those jobs being advertised. However, I can think of some excellent readers of The Guardian whom we could ask to operate as spies.
Anecdotally, it is said that if we ask two economists the same question, we will get two quite different answers. Speaking as someone with two degrees in the dismal science, my experience is that the number of answers is often at least four or five. On a serious note, I believe that the Chancellor has added even more answers over the past 10 years to some of the questions that have been out there since the dismal science first became a discipline. In a sense, he has confounded the textbooks. When I was at university, I learned as a fact that there was a trade-off between inflation and unemployment, for example. Indeed, brains bigger than my own have earned their reputation by describing that trade-off and plotting the graphs to illustrate it. The experience of the past 10 years has been precisely the opposite, however, with low inflation and low unemployment occurring at the same time.
I also learned from political theory that there was a trade-off between parties that promoted economic prosperity and those that prioritised social justice, and that the two were mutually exclusive. The experience of the past 10 years has shown that there are new answers in that field as well, given that we are now in the longest period of sustained growth for 200 years under this Chancellor, and that 2.5 million people have been taken out of relative poverty. Relative poverty is the hardest measure of poverty, involving those on less than 60 per cent. of median income, even accounting for overall incomes going up. Within that overall figure of
2.5 million, pensioner poverty has improved dramatically, as I have seen directly in my constituency. There have also been measures to improve child poverty, which perhaps have not taken effect as fast as we would like, but I am sure that the measures announced today will be faster.
I want to delve deeper into the concept of relative poverty and how it has changed. A briefing note from the House of Commons Library, including a useful time series, showed that, according to the definition that I have explained, 12 per cent. of people lived in relative poverty in 1979. By 1997, that figure had risen to 18 per cent. That is the legacy of the Conservative years. By 2005, the trend had moved in the opposite direction: it rises, plateaus, then starts to fall again. The latest data, from 2005, show the figure to be 16 per cent. That is not as fast a fall as we would like, but I think that the figure will fall faster in subsequent years, and I am convinced that it will continue to fall as a direct result of today’s Budget. It is a redistributive Budget, and I am extremely proud to be a member of the party that proposed that.
We have seen a shift in the way in which the UK economy works. We are a richer and more just society. We have low inflation and low unemployment. How has that been achieved? It has been done in a number of different ways, and I want to pick out three in particular. First, and most importantly, the Government had the foresight to realise that reducing levels of debt at an early stage would free resources later. When I was working in the dismal science, it was my job to forecast macro-economic trends in countries in eastern Europe and the former Soviet bloc, which are in no way comparable with our own. I remember looking at the levels of debt in different economies and forming an understanding of the impact that critical levels of debt have on living standards. To reduce our debt to below 40 per cent. is a substantial achievement, and has freed up the resources that we are now able to spend on investment.
Sammy Wilson: While, on the surface, the national debt figures appear to have been held, does the hon. Lady accept that the exclusion of huge amounts of capital expenditure that would normally have been part of the public sector borrowing requirement means that the debt picture is not, in reality, as rosy as she describes?
Kitty Ussher: No, I would not accept that. Very good economists have analysed whether that expenditure should be included, and concluded that it should not. Furthermore, we are talking about direct Government debt, for which the Government are responsible, and because the Government are by far the largest player in the economy that has a direct macro-economic effect. Perhaps my hon. Friends on the Front Bench would like to respond further to that later, but that is my understanding.
Secondly, the Government set a low and credible inflation target—credible because it was managed by an independent central bank, which has been long debated. The effect, which we have seen recently, is to bring down inflationary expectations, and therefore interest rate expectations. Consequently, when companies and individuals seek to borrow, they can do
so at much more preferential rates, which has had a huge effect on building the capacity of the economy and keeping more people in work.
Thirdly, and crucially for this Budget, the Government have not been afraid of massive interventions on the supply side to raise the capacity in the economy and to increase levels of education, research, science and so on. Conservative Members may mock the new deal, and they did so while the Chancellor was speaking—that is not surprising, as perhaps they would abolish it—but they must realise that that kind of targeted welfare-to-work policy has had a transformational effect on employment levels and on the individuals affected. My argument is that it should go further. I am delighted that we are now using the same techniques to lift the long-term unemployed and those on incapacity benefit into the workplace where that is possible for them.
We now need to focus on people in work with low salaries. Immediately and crucially, we must do so through the tax credit system, but we should also learn some of the lessons of the welfare-to-work and new deal programmes. We should consider a new deal for those in work, with targeted career advice so that they understand where, if they invest in such training, it could be expected to take them in five or 10 years’ time. Experience has shown that such an approach is effective for people who are out of work; let us apply it more widely and, perhaps, draw lessons from organisations such as learndirect in extending it to the workplace. I should be interested to know what Conservative Members think of the idea, but I doubt that they could cope with it conceptually.
Rob Marris: They are thinking about it.
Kitty Ussher: I can see them thinking hard.
Over the past 10 years or so, our policies have shifted the United Kingdom’s economy to a different paradigm. It has more capacity than it used to have. As a relatively new Member, I can see the effects on my constituents. Employment levels are high—higher than they have been for a long time.
I look at newspaper cuttings and I talk to my predecessor Peter Pike, who served Burnley well for many years. He says that people no longer turn up looking for work as they used to do. When the structure of the economy changes and factories close, people do not tend to be out of work for long now because there are other opportunities—although I am proud to say that much of our manufacturing sector is doing extremely well. In the past six months I have visited 10 or 15 high-tech manufacturing companies, the vast majority of which are taking people on. I am sure that businesses in my constituency will welcome the fall in corporation tax, and people who have been employed in firms that have gone bust will certainly welcome the extension of the financial assistance scheme.
As a result of the improved national economic situation, my constituents are benefiting not only from higher employment levels, but from direct transfers from the centre. That is right and proper, because ours is one of the poorest parts of the country.
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