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In the slightly longer term, we are looking for strategic decisions on the high-speed rail network. I raised that issue with the Transport Secretary in questions a short
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time ago. I argue strongly that, as well as a line to Birmingham, we can take a line off from Rugby—the old Great Central line—and run it through between Nottingham and Derby up between Sheffield and Rotherham and on to Leeds. There is no reason why we should think simply about one line. A line to Leeds via Nottingham and Derby and Sheffield and another line going up to Manchester seems to provide an entirely sensible system if we then have a proper link through the Woodhead tunnel linking the west of the country with the east. The possibilities for rail are real, and I hope that the Government remain committed to them, because their development would be good for British industry, for the travelling public and for the environment.

I welcome the extra money for the Warm Front programme, but tenants who live in social housing are still at a disadvantage because the work permitted under that programme is available to owner-occupiers and private tenants on particular benefits, but not to social housing tenants. It is not just a matter of insulation—often houses in the social housing sector are well insulated—but often a problem with old and antiquated boilers. If social housing tenants had assistance through the Warm Front programme, we could do an awful lot to make their homes more energy efficient and save those tenants money.

It is absolutely right that the Government are targeting help on unemployed young people and the long-term unemployed. Again, I go back to the 1980s in Sheffield. We are still suffering today from the problems caused when the breadwinner of families became unemployed in the 1980s, never got back into work and invalidity benefits were seen as a substitute for jobs. As a result, one generation after another has remained unemployed. We have to recognise that long-term unemployment is a major social problem as well as an economic one, and we must ensure that we focus on those people. It is often easy to forget about them. With more people becoming unemployed, those who have been unemployed the longest and who perhaps have the fewest skills are often forgotten about altogether because they are the hardest to deal with. We must not let that happen now.

When people lose their jobs, it is also important to ensure that they do not lose their homes as well. The Government have already taken steps to ensure that people who end up on income support get help with their mortgage payments after three months, rather than nine months. That was a good step, as is the home owners mortgage support scheme that was announced this week. That scheme will be important, because it is not usually the whole family that goes on to income support. Instead, one family member might become unemployed or go on to short-time working, but the family as a whole relies on both people working full time to support the mortgage. That is why our support for home owners needs to become more flexible in enabling them to keep their homes. When one member of a family becomes unemployed, the family as a whole does not get income support, and it is going to struggle to pay the mortgage. The home owners mortgage support scheme therefore represents an excellent step forward.

In questions earlier this week, I raised the issue of private tenants with the Housing Minister. More people are going to get into difficulty when the owner of a property—sometimes on a buy-to-let mortgage, but sometimes not—defaults on their mortgage, and the private tenants, who have paid their rent and done
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nothing wrong, suddenly find that their home is at risk. I know that the Government have an agreement to extend the period of notice involved, and I have some sympathy with the mortgage lenders in this regard. When they offer a buy-to-let mortgage, it is clear to them that tenants will be in the property. Unfortunately, however, some home owners with an ordinary mortgage subsequently let their property without telling the lender, which can lead to real difficulties. We have to take that issue on board, and I was pleased that the Housing Minister recognised that that problem still exists and that the Government need to introduce further measures.

I also welcome the help for building more homes, for buying up empty houses, including those on sites where private developers have not been able to sell, and for encouraging local authorities to begin building programmes. We must think about the longer-term issues as well, however. The Government have set a target for 40,000 units of social rented housing to be built each year, but that target is unlikely to be hit, even with this extra help, for the simple reason that section 106 agreements are no longer coming to fruition because the private schemes that would have delivered them are not being built.

Also, housing associations are in difficulties because most of them rely on a mix of funding for their schemes. They get some money from the social housing grant and some from building houses for sale on the same site as their rental properties, which involves cross-subsidising. As there is now greater uncertainty about whether those houses will be sold, the housing associations cannot get private finance and many of their schemes are simply not happening.

There is therefore going to be a real problem hitting the 40,000 target, even with these extra measures. If there is to be any chance of moving forward on building social housing for rent at the moment, the Government must make it absolutely clear that they will provide the money to local authorities that are prepared to provide their land for free in order to make these schemes happen. There is a challenge for local authorities up and down the country to come into partnership with the Government and to get social housing grant, but they then need to make that grant go further by putting their land in for free in order to get homes built in their communities.

Local authorities often moan about the shortage of housing, and there is a real shortage up and down the country. That problem becomes more stark when people cannot afford to buy or cannot get a mortgage. More people are therefore going on to local authority waiting lists, and there is a real shortage of rented housing. This is certainly true of my own constituency; I get people contacting me about this problem almost every day. However, local authorities must be prepared to step up to the mark and recognise that this is a priority for them as well as for the Government.

I have often said to the Government that we must consider the longer-term issues that will apply when we come out of the recession. The fundamental demand for housing, either for purchase or for rent, has not gone away. One of my real worries is that we shall now go through a period of no training for skilled workers for the building industry. It was only a year ago that we were welcoming people from the Czech Republic, Poland and many other places to help us to sustain our house building and to carry out home improvements through
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the decent homes programme, because we had a shortage of skilled workers. We could now have three or four years in which fewer homes are built, with people being laid off and drifting out of the industry, and no one being trained.

Once demand returns, however, there could be a real problem if we go back to the old housing inflation. Demand will not have gone away, but we will have had a period without adequate supply, in which people have not been trained and others have been lost to the industry. When demand comes back, the resulting shortage of capacity could lead to another sharp upward spike in house prices. How we cope with that and retain people in the industry—we need to retain people in skilled manufacturing jobs as well—is a real challenge.

I am a little disappointed that the Budget paid no attention to the need to offer some help for short-time working in various industries, which has happened in many continental European countries, because that is one way in which we might have been able to keep more skilled people in manufacturing and construction. If the Government had assisted with that, we might have been able to retain more skilled workers. That challenge still has to be met.

No one likes paying more at petrol or diesel pumps for their fuel—an inevitability in current circumstances. One issue people have raised with me—I do not have an the answer for the Secretary of State for Energy and Climate Change—is that they should be buying diesel cars because they are more fuel-efficient, yet diesel is more expensive, quite a bit more expensive, than petrol in this country. In many countries on the continent, diesel is much cheaper than petrol. Why cannot we offer diesel at the pumps for at least the same price as petrol? Why do we have this price differential, which encourages people to buy less fuel-efficient cars? The Government should have a word with the industry about that with a view to mitigating some of the extra costs.

On the beer tax, I know that the Government have to raise money, but there is a difficulty with their proposal. Clearly, we have a problem with binge drinking, which is mainly about crates of cheap lager from the supermarkets getting into the hands of young people, and I am sure that we have all heard complaints from our constituents from time to time about that sort of activity. However, we face a fundamental problem in terms of the demise of the British pub as a community institution, so carrying on regardless putting up the beer duty will have an impact. The problem is not just one for the Government. The other day, I met a group of tenants in my constituency who work for Enterprise Inns; they did not point their fingers at the Government, but said that, in their calculations, Enterprise Inns could make a pound a pint on the beer it sold, so perhaps putting 2p on beer duty was not the real issue. Nevertheless, the Government need to be sensitive about this point. Yes, of course we are against binge drinking; yes, of course we want sensible measures to deal with it; but if that means putting at risk community institutions such as pubs, we need to be very careful indeed. I urge the Government to think again.

Martin Horwood: I am speaking more from a constituency point of view than as a Front Bencher, but I strongly agree with what the hon. Gentleman says
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about traditional pubs. Does he agree that having a differential duty that is more generous to beer and encourages drinking in traditional family pubs would actually create a social environment that militates against binge drinking, which is an important factor in the wider issue?

Mr. Betts: I think it does and I have written to my hon. Friend the Exchequer Secretary to say that a differential tax—on beer sold in supermarkets as opposed to beer sold in pubs—would be very helpful. It may well be that we cannot do that, but it is an issue that needs addressing.

The Exchequer Secretary to the Treasury (Angela Eagle): On that very point, we have looked at this matter and I am afraid that EU directives work in such a way as to make it impossible to tax the same item differentially, according to where it is sold. That is simply not possible.

Mr. Betts: I thank the Minister for that explanation, and I know that she has also written to me about it.

Mr. Weir: Does the hon. Gentleman think that the Scottish Government proposal to introduce minimum unit pricing, which would deal with the problem of cheap deals in supermarkets that fuel binge drinking but at the same time keep prices reasonable in pubs for more civilised drinking, may be another way round the problem?

Mr. Betts: I am not absolutely convinced of the case for minimum pricing, as there are some difficulties with it. All I am saying is that there is problem about the future of pubs that is worthy of debate across Government to see whether some way forward can be found.

Finally, I should like to discuss one part of my constituency that has the potential for the major regeneration that other parts of my constituency have already enjoyed. It is around the canal in Sheffield, to which British Waterways is very committed. It is working with local people, and David Slater, who has worked closely with me and the council on these matters, is involved. British Waterways is a key part of the regeneration, so we were a little concerned that in stretching its assets, the Treasury might be looking at fire sales of some property. I hope that I am receiving signals of reassurance that British Waterways will not be forced to sell off much of the land around the canal. That may be necessary at some point in the future, but British Waterways has a very good track record of sensitively developing that sort of land and the surrounding buildings, so gaining maximum value for local communities, stimulating wider regeneration and using such properties on the land appropriately. I am not sure that it is a good idea simply to sell the land off to private speculators who may not develop it in the near future, and may develop it badly when they eventually do develop it. I hope that the Government will reassure us that British Waterways will be assisted to develop it properly.

I have tried to cover a number of points. I support the Budget and the help that it will give the economy in general and, in particular, my constituents, who face a difficult time. I believe that the Government’s strategy of providing assistance rather than cuts during the current recession is right and appropriate.

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2.55 pm

Angela Browning (Tiverton and Honiton) (Con): Let me begin by saying something about personal debt. Many people throughout the country are extremely worried about their personal finances during what will be—notwithstanding the Chancellor’s announcement yesterday—a long and deep recession. They are worried about their jobs and their housing problems, and elderly people in particular are worried about what will happen to the income on which they rely from investments, especially building society and bank savings accounts.

We know that even before the recession started, the savings ratio had halved under the stewardship of this Labour Government. That should have sounded a loud warning bell to Ministers, but they were very tardy in attempting to do anything about it. When people lose the incentive to save—to put money aside for a rainy day, or perhaps to fix the roof while the sun is shining—it is a very serious matter, not just for them personally but because it changes the culture in the country. It affects people’s feeling that they have a personal responsibility to put money aside.

For many years, I have been concerned about the way in which the younger generation—by which I mean young people of working age, many of them bringing up young families—have taken account of the experience of their mums and dads, who have suffered under this Government as a result of the erosion of their pensions. The former Chancellor’s hundred-billion-and-counting taxation raid on pension funds means that many people now do not have the funds that they expected to receive. All too often, their adult children think of what has happened to mum and dad and ask, “What is the point of putting money into a pension?”. That should be a worry for us all, and for them in particular, but the Government do not appear to have recognised that the problem has been building up over many years. Now that we are experiencing this appalling recession, the problems of pensioners and those about to retire are particularly acute.

The Government had an opportunity yesterday to remove the basic rate of taxation on people with investment income, but failed to take it. Although I welcome the Chancellor’s announcement of an increase in the tax-free amounts in personal individual savings accounts, many people on fixed incomes, especially the pensioner population—a great many pensioners live in my rural Devon constituency—do not necessarily have the capital to put into an ISA. They have depended on interest on which they have drawn regularly to pay essential household bills, including bills for utilities such as fuel, and they feel extremely vulnerable now that interest rates are falling while they continue to be taxed on their income if the aggregate is above the tax threshold. Price reductions do not necessarily help them. In February this year, the Institute for Fiscal Studies estimated that the poorest pensioners—those over the age of 80—faced an inflation rate of 6.7 per cent., more than four times the rate affecting the general population, because of the types of products and services on which the very elderly rely.

We have had many debates in this House about the costs of the various baskets of items that represent the retail prices index, for example, or the real rate of inflation. Members do not need me to explain all the specific individual needs of the over-80s, but their purchasing pattern is very different from that of the rest
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of the population. Interest rates have fallen, and those with modest savings who rely on interest rates to supplement their income have been hit particularly hard. Therefore, I regret that the Government did not take the opportunity to adopt what was a Conservative policy. They have adopted Conservative policies in the past, such as on inheritance tax. Had they done so on this occasion, I promise that I would not have stood here today and said, “You’ve pinched one of our policies”; instead, I would have warmly welcomed the abolition of the 20 per cent. tax rate on investment income for basic rate taxpayers.

Ms Sally Keeble (Northampton, North) (Lab): This is an important point, and all Members will have encountered constituents who raise such concerns. Does the hon. Lady agree that it is important that people with modest savings whose income from those savings has decreased should look at the changes to the capital arrangements for pension credit? It is, of course, just the income that is taken into account, but nevertheless a raising of the threshold will have a huge impact, and some people might look at pension credit as being a sensible way of supplementing their income in the current difficult circumstances they face, even if they do not like claiming benefits.

Angela Browning: The hon. Lady raises a good point, and that will help some pensioners, although not all. She also points to an issue that I hope the Government will take very seriously. Will they, through various agencies such as the citizens advice bureaux and Age Concern, redouble their efforts to ensure that anybody who is entitled to a state benefit, whether means-tested or not, is encouraged to apply for it and is assisted in obtaining it as soon as possible? I have held surgeries with my own CAB offices to encourage pensioners to apply for various benefits that they were entitled to but did not know they were entitled to, or—to pick up on the point the hon. Lady raised—were entitled to but resisted because they feel means-tested benefits are demeaning. They find the form-filling rather difficult and some of the questions are very personal and can put many of them off.

I have referred to the over-80s. They are members of the generation above mine. It is the generation that lived through the second world war. I am a baby boomer; I was born the year after the second world war ended. I am, because of my age, very familiar with the age group that is one above my own. They are a very proud and independent people and they will not come forward voluntarily to apply for benefits. Nevertheless, I think that we as Members of Parliament, and certainly the Government, should do all we can to make the process as dignified and simple as possible. In this recession, there is an enhanced opportunity for the Government to do all they can to make sure the statutory bodies, voluntary services and charitable agencies encourage more people who are entitled to apply for such benefits to do so. Nevertheless, there was something that the Government could have done yesterday, and I very much regret that they did not take that opportunity.

I began by talking about personal debt. As I represent a rural constituency where communications might not be as good as in a city or large town, I am concerned that a lot of people living in small isolated communities
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do not always receive information and do not get to know about things as easily as those in urban areas. There is an issue to do with people who loan money—the loan sharks if I may call them that. I am sure all Members have had to deal with constituency casework where people have clearly been taken advantage of—often some of the very poorest people who are truly on the margins in terms of their financial viability. I urge the Government, particularly at this time, when people are going to find the coming years extremely difficult, to ask the Office of Fair Trading to look again at better regulation of the consumer credit market.

In some parts of the country, credit unions do an excellent job, but they, too, are not as easily available and known about in rural communities as they are in city centres. When they were first introduced, they were located in areas where it could be clearly identified that the population there might well benefit from them. Of course, in rural areas, people are scattered about and do not form a hub. None the less, there are outreach services and statutory agencies that can act on their behalf.

I ask two things of the Government on behalf of people who are on very low incomes, including not only pensioners, but those of working age. Will the Government ensure that the consumer credit market is properly regulated? Will they examine how we can roll out credit unions in a more unified way, particularly in the rural parts of the United Kingdom, because I am sure that they will be needed? They will solve a lot of problems for people who might otherwise be seriously taken advantage of.

The other loan sharks that I wish to mention are the banks. They have had a bad press and, like everybody else, I wish to see the credibility of the British banking system restored in a way that allows us to have trust in it, both as personal bankers and, on a much broader level, in terms of its importance as a national institution. I fear that we still have some way to go and the process of restoring confidence will go far beyond this recession.

The Financial Services Authority has clearly failed. We have had debates in the House about how the rules have been changed, how the role of the Bank of England has been changed and how powers have been divested to the FSA. It is essential that the regulation of the financial institutions in this country is clear and transparent, and that it works. When we have debates about regulation and I speak from the Conservative Benches, very often people say, “You always want a light touch. You always want less regulation, not more.” I believe that we have got it totally wrong in this place when it comes to regulation. I often find that regulation hits in the most top-heavy way areas where a light touch is needed, and we over-regulate in areas that need a light touch. However, in areas where proper regulation is needed and needs to be enforced, for some reason we get it wrong.

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