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I am sure that some people in Beckenham will welcome the car scrappage scheme. If it helps the car market, I do not have a problem with it—my car dealers are probably delighted—but I have a rather cynical view about what will happen to all the cars that are to be scrapped. Will they go into the scrap market, thereby reducing the value of scrap metal? Will they take over the fields that are to be freed up by the sale of the new cars coming on to the market? Will they be exported to
developing countries and will there be an even bigger scandal because we have exported our old, polluting cars? There are large opportunities in the car scrappage scheme for scams and fiddles.
A point that has not yet arisen in the debate is the impact on the retail sector of the various increases in business rates. There will be a 30 per cent. Government-imposed increase for the retail sector. There will be a revaluation of commercial property based on 2008 figures, at the height of the property boom. We have already seen the effect of empty property rates and now local authorities could levy a business rate supplement to provide infrastructure.
People in Beckenham are complaining about the continuing impact on the whole British social scene of the increase in beer prices and its effect on the profitability of pubs. We have talked briefly today about the incompetence of the Learning and Skills Council and the lack of further education and sixth-form funding. That will have a long-term impact on the recovery of the economy.
Time and again, we see incompetence from this failing Government. It is a long time since we have seen such incompetence. We have seen a real decline in their will to govern. It is time they recognised that they have lost the will and it is time for them to go.
7.38 pm
Dr. Roberta Blackman-Woods (City of Durham) (Lab): Most Labour Members thought the Budget a fair and reasonable attempt by the Chancellor to tackle the worst impact of the recession on families and businesses. It identified and supported, where possible, areas for growth in the economy to help us come out of a recession born of the international credit crunch. It really is absurd and ridiculous for Opposition Members to suggest that the global economic downturn can be attributed to the policies of the Labour Government.
I want to speak about three specific aspects of the Budget and their possible impact on my constituents: help to support unemployed people back into jobs, especially those between 18 and 24; support for businesses, especially those helping us towards a low-carbon future; and help for housing.
Between 1997 and 2008—the time of the Labour Government—employment in my constituency rose by 17,000, which was an extraordinary and positive development. Unfortunately, unemployment in my constituency is now rising. Therefore, during this recession, it is important that we do not adopt the old Tory policies of the past two recessions, which amounted to doing nothing and writing off not one but probably two generations of families. The Tories did nothing for people who lost their jobs and little for young people in school either. They also took no action to tackle the deindustrialisation of the economy that took place in the 1980s and, to some extent, the 1990s. Critically, that meant that they did not identify and support future growth areas, and they also simultaneously disinvested in education and skills.
I want to ensure that this Government do not make the same mistakes, so I especially welcome the package to get 250,000 people back into work and to stop young people entering the ranks of the long-term unemployed. The intention is to provide 100,000 jobs for young people, largely through sectoral pathways in the private
sector, through a recruitment subsidy of £2,000 and an additional £1,000 for training, and the measure is specifically welcomed by some of my local businesses. The key sectors identified are care, green industries, and hospitality and tourism. They are important for not only our future economy, but the future of our public services.
It is also worth highlighting the additional £1 billion for creating 100,000 jobs through local authorities and the third sector. The measure is very much about creating jobs in and for our local communities. The local projects will cover such things as arts, the environment and social care. Critically, the jobs will also support the social enterprise sector. I will be urging Durham county council, my local authority, to put forward an expression of interest for some of the money by the May deadline. Parts of County Durham have been particularly affected by the economic downturn, so I hope that some of the money comes our way.
The Government also outlined support in the Budget for a further 50,000 jobs for those areas that are especially disadvantaged and in which unemployment is hitting hardest. I will be arguing that some of that additional support should come to the north-east in general, and County Durham in particular. The critical aspect of the Government’s actions is that they are intervening to support job creation in the parts of the economy that particularly need it and the places in the county hit hardest by the recession.
Yesterday’s debate, which focused on business, clearly showed that the Government intend that a third of the £750 million strategic investment fund should be earmarked for low-carbon projects. If we are not to lose further ground to our competitors, it is essential that, even in these difficult times, money is found to invest in renewable energy projects and low-carbon developments, such as electric cars. I especially welcome the £405 million to support low-carbon industries and advanced green manufacturing that will help to make the UK a world leader. I also welcome support through the renewables obligation for offshore wind investments that reach financial close between now and 2011. It is expected that that will support £9 billion of investment and power up to 2.8 million homes. I welcome the new funding mechanism to support up to four carbon capture and storage demonstration projects and the £90 million to fund detailed preparatory studies. Several north-east Members have been arguing for additional investment in CCS for some time, so we are especially pleased by the inclusion of additional money for that in the Budget.
In addition to investing in the green economy of the future, the Government need to continue to invest in the development of skills. Of all my sources of anger at the last Conservative Government—there are many, but I will not go into detail because some of them have been outlined—the one about which I feel most strongly is the way in which investment in skills and training ebbed away in each successive year of that Conservative Administration, thus sucking opportunities and young people’s potential out of our communities and leaving generations without any prospect of employment and with no belief in themselves. It is essential that the Government keep investing in the development of skills in our communities.
The Conservatives might be talking about problems with further education college building programmes now, but that is truly ironic, because during their period
of tenure, they made no capital investment whatsoever in FE colleges, while the schools in all our constituencies were often past their use-by date.
Such lack of investment was reflected in the poor attainment of some of our young people. In 1997, about 30 per cent. of young people in County Durham got five or more A to C grades at GCSE, but the 2008 figure was 66.1 per cent. That absolutely huge increase did not happen by magic but because we mended the roof—or, more accurately, built new schools—while the sun was shining and doubled investment in education.
If the Tories want to know where the money was spent—they appear to need to understand that, because their party’s leader tells us each week at the Dispatch Box that the Labour Government wasted it—I would like them to visit my constituency, where they will see the new hospital, the new FE college and new school buildings. There has been record investment in health in my constituency—we have no NHS waiting lists—and there are six Sure Start centres. There has also been a huge increase in employment and industrial development since 1997, although I recognise that that is suffering somewhat at the moment. All that cannot possibly be described as wasted money.
I urge the Government to continue to invest in not only education and skills, but our public services. I also want the money that goes to universities, especially for science, to be protected because universities and science are essential for our future economic development. The Budget adds to substantial investment in schools and colleges to provide help for training young people and I am pleased that there will be a further £250 million to enable 16 and 17-year-olds to stay in school or undertake training.
I applaud the money set aside to more than double the provision of apprenticeships. It is important that we have a wide range of qualifications and pathways to employment open for our young people. In my constituency in particular, apprenticeships are a brand of training that is well recognised and valued. Also, nothing is more important than that we continue to invest in Train to Gain.
Mr. Philip Hammond: I was trying not to be provoked, but I cannot do it any more. The hon. Lady is reeling out a list of great things on which it is good to spend money and, in a perfect world, of course it would be, but has she read the Budget that her right hon. Friend the Chancellor presented last week? Does she understand the scale of the public spending cuts that he is projecting for the years to come? Does she have any insight into where those cuts will be made if a Labour Government are re-elected?
Dr. Blackman-Woods: I can answer the first part of the question easily: yes, I have read the Budget.
As I was saying, nothing is more important than that we continue to invest in Train to Gain to support and upskill people in employment. In particular, we must continue to support union learners, who are so excellent at persuading people in the workplace to acquire new skills. We must also encourage young people to value education. I do not think that we can ask them to value their education if we do not value it. We in County Durham were only just starting to overcome the past scepticism about what learning can bring; we must
continue to make progress. In partial answer to the hon. Gentleman’s question, let me say that, whatever else we do to get efficiency savings, it is critical that we continue to develop our education system and to invest in education and training.
In my constituency, we have just opened a new school, Durham Johnston, which is excellent—much better than anything that I had imagined; it is state of the art. We also have another school, Framwellgate Moor, starting in about a year, as well as a new academy backed by Durham university. The hon. Gentleman has just demonstrated the truth of my next statement: I simply cannot imagine investment on such a scale happening under a Tory Government. It is unfortunate that the whole of the British media and a great many people in the country apparently have such short memories.
We must invest in skills development and knowledge transfer if we are to compete in the global economy of the future. I am therefore pleased about the additional funding for the Technology Strategy Board. We in this country have not always managed to apply technological developments well to create jobs; we have to do that better in the future.
Finally, I hope that the Government will use the additional £600 million to support new house building, as well as the measures previously announced to encourage councils, either themselves or in partnership with others, to build more council houses and to continue to provide affordable homes that are much more energy efficient than those provided in the past. It is a source of great sadness to me that, in my constituency, many opportunities to build affordable and rented properties were not taken by the Liberal Democrat council during the years of growth. The council simply let the market rip, with too many apartments being built, and now we lack good family housing and a real mix of tenures. The Government must put that right by enforcing planning policy statement 3 in any future house building initiatives. We must learn lessons so that money is used wisely from now on to plan for a sustainable future, to invest in low-carbon industries and to ensure that housing is delivered for everyone and not just those who can afford the latest market offering.
7.54 pm
Mr. Nigel Dodds (Belfast, North) (DUP): There is no doubt that the Budget statement delivered last Wednesday was one of the most significant that the House has heard in several decades, but I strongly suspect that the one that follows the next general election will be the most significant of all. Then, when the real decisions that will affect the whole country are taken, we will see the true extent of where we are headed, although we have a good idea of the general direction, having listened to the Government’s projections for future expenditure growth, as well as the Opposition’s.
The context of this year’s Budget has changed significantly compared even with last year’s. Earlier, we heard an exchange between the right hon. Member for Oldham, West and Royton (Mr. Meacher) and the hon. Member for Edmonton (Mr. Love) in which reference was made to Lehman Brothers. I remember just over a year ago, in the run-up to the US investment conference
in Northern Ireland, in my capacity at that time as Minister of Enterprise, Trade and Investment in the Northern Ireland Executive, visiting Wall street and the headquarters of Lehman Brothers. I was taken to the 75th floor, where a presentation was made to me about the bank’s global ambitions and how it hoped to expand and perhaps invest in Northern Ireland. The fact that that bank has now disappeared shows the extent of the change that has happened.
At this time last year, people’s biggest concern was the cost of living—the rise in energy prices and the cost of mortgages. Now, their concerns are much more focused on whether they will have a job or keep their home. Various parts of our economy have been devastated, especially the construction industry. We in Northern Ireland know all about that, because the construction industry plays a massive role in our economy, particularly in the private house building sector, which has been utterly devastated. The extent of the downturn and its rapidity have staggered everyone and made people extremely frightened and anxious about where we are headed. We have heard all the talk about unprecedented times and the worst borrowing figures since the second world war. Given the eye-watering amounts that have been mentioned in connection with the banking crisis and so on, for most people these truly are uncharted waters, so they are extremely worried.
This year’s Budget was largely defined by the massive downturn, although I think that most commentators were right to say that the Chancellor has been over-optimistic in his growth projections. The Budget will be regarded historically as very much a holding Budget before the real decisions are taken after next year’s election. The fact is we have to deal with the present position; we cannot go over the history of how we arrived here—whether it is entirely a global phenomenon, or more of a domestic creation. I think that there is a little bit of truth in both analyses. The accusation can be made that, since coming to power, the Government have increased public spending based on additional receipts, but gained too little in terms of our public services and structural foundations. However, we have to address the here and now and how we get through the next period.
During this debate, we have heard much discussion of whether we should go for a fiscal stimulus, or ride out the current crisis and allow matters to take their course, and all the shades of grey between the two views. I have to refer to the contrast between what this country is doing and what others are doing in terms of borrowing now to invest. We should compare that with what is happening in the Irish Republic, which is having to try to cut its way out of recession. Of course, we know that one of the reasons it is in that position is that as part of the eurozone it has a lot less capacity than the United Kingdom, in terms of the currency being devalued, and in terms of borrowing and so on. People in Northern Ireland are grateful at the moment that we are part of the United Kingdom and out of the eurozone. Northern Ireland has benefited on both those scores.
The daily influx of shoppers from the Irish Republic to Northern Ireland shows that people see real value in the cost of goods and services in Northern Ireland, to the extent that one major national grocery chain in the United Kingdom has a 2 or 3 per cent. share of the
market in the Irish Republic without having a single store there. That tells a story, and shows that people are voting with their feet.
Mr. Hayes: While the hon. Gentleman is making a comparison with the approaches taken in different countries, he might consider the following point. There are two ways of approaching the crisis. The first is to inject a fiscal stimulus into the economy, as he put it. However, to make a difference of about 1 per cent. in unemployment, one needs to inject a stimulus of about £39 billion, according to most academic studies. Frankly, the Government simply do not have enough money to do that effectively. The Keynesian route, advocated by the right hon. Member for Oldham, West and Royton (Mr. Meacher) in a very eloquent speech, is simply not possible. The alternative route is retrenchment. The Government are not really going for that in a meaningful way. We are falling between two stools, which is likely to have a very limited effect.
Mr. Dodds: I am grateful for the hon. Gentleman’s contribution, and I understand what he is saying; effectively, his point is that if we want to make a real difference, we have to go much further. I remember a previous debate in the House in which the Liberal Democrat spokesman, the hon. Member for Twickenham (Dr. Cable), made the point that the Americans’ fiscal stimulus was on a much greater scale, and that it would require something of that magnitude to make a difference. Nevertheless, I believe that it is better to try to inject some kind of fiscal stimulus in the current situation than to go the other way. The approach adopted in the Irish Republic illustrates how painful the alternative is.
I hold the position of Minister of Finance and Personnel in the Executive, and the fact is that there is a certain amount that the Executive and the Assembly can do locally to try to help the people of Northern Ireland—businesses, communities and hard-working families—through the current challenges and difficulties. We have taken measures to try to do that, such as freezing the small business rates in real terms as of 1 April this year, and introducing the small business rate relief scheme from April next year. We are also bringing forward procurement spend for major capital infrastructure projects in Northern Ireland. We are ensuring that as much of that as possible is spent as quickly as possible. We are introducing the speedier payment of Government invoices, so that money goes out to businesses and firms that are trading with the Government as quickly as possible. There are also reforms to the Planning Service.
We could go further. Our party has suggested that there is a need to look at the issue of government infrastructure, and how much money we are spending on the machinery of government. A number of Members today referred to suggestions on how public expenditure could be cut without going into the details of individual Departments’ spending. In Northern Ireland, we have 11 Departments running a Province of 1.7 million people. There is growing consensus that a Province the size of Northern Ireland does not need 11 Departments; we could get by with a lot fewer.
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