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Lynne Featherstone (Hornsey and Wood Green) (LD): I recently went to visit my local citizens advice bureau to see how its staff were faring in the economic downturn. They told me that their recent figures show that visits have increased by nearly half in the past year, and painted a stark picture of the recession in Haringey. They have seen a 44 per cent. increase in visits from
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residents of Hornsey and Wood Green compared with last year. Most of those new inquiries were job-related; almost twice as many people as last year are asking for employment advice. Unemployment has a knock-on effect on other areas of concern such as debt and benefits advice. Between 2007-08 and 2008-09, there has been a 60 per cent. increase in debt inquiries and a 30 per cent. increase in benefits inquiries.

A whole raft of people who are usually employed have become, in a sense, a new wave of unemployed. They have no experience of how to work their way round a benefits maze or to understand their statutory rights or what is available to them in help from the Government. Many of my local residents are clearly struggling with the recession and in need of such help and advice. The best way to be recession-proof, or as much so as possible, is to know one’s rights and entitlements. The citizens advice bureau is therefore vital.

I saw a constituent this week who is not so well, and she has been trying for four weeks to be seen at the local CAB. It has a queuing system, so people have to get there very early in the morning. Because my constituent is not well, she waits for an hour and then has to go home again. It is no use having a citizens advice bureau if it is buckling under the weight of the rising number of inquiries resulting from the effects of the recession and if it does not have enough advisers to cope with demand. Given that dramatic rise in inquiries, I was disappointed that there was nothing in the Budget about extra grant funding. Of course, I am on to the local council, Haringey, as well, but its main funding comes from national Government. I am sure that my constituency is not alone in being affected.

I have been to speak to the North London Network, which comprises very small businesses, including one-person businesses. They are suffering dreadfully. The banks are still not extending loans to them, and there is no relief from their landlords in moratoriums on rent rises. I wondered about the possibility of automating small business rate relief. That is quite complicated to apply for—I think that it is based on square footage—yet it is worth about £1,200 a year to small businesses. It would help them enormously if it were automatic.

We recently had a debate in this House on what would happen to women in the economic downturn. We agreed, on a cross-party basis, that it would be tragic if the high level of female employment and the advances made on equality were swept away by the recession. Women already have a tough time in the workplace. It was clear from the debate that sectors such as retail and services, which are populated mainly by women who are already poorly paid, would be hit extremely hard, as would part-time work.

Another problem is employers and others apparently believing that somehow women’s earnings are not as important as men’s and that if someone has to go, it should be a woman. I have not told the hon. Member for Bromsgrove (Miss Kirkbride) that I would mention her, so I apologise to her, but she raised that issue in the previous debate, saying that she had known people who had heard of such situations. She was absolutely right in her contribution.

We must also consider maternity costs. In a recession, with employers facing unprecedented challenges in maintaining the viability of their businesses, maternity benefits may be a cost too far, particularly for good
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employers who pay above the statutory minimum. As employers try to squeeze their costs down, it is not hard to imagine that firms offering maternity pay plus benefits will begin to reduce such costs. Women who choose to stay in work rather than be persuaded out of it will have to manage on a very low amount if their benefit is reduced to the statutory minimum, which is £117.18 a week. Miraculously, most women receive about £400 a week because of good employers providing maternity pay plus benefits. That is a substantial difference.

Alternatively, if offers are made to women not to come back to work after maternity leave, and instead to receive a redundancy package, it is reasonable to assume that some will exit the workplace. Evidence about that is being collected. They will then face even greater barriers to getting back into work in a few years’ time.

The Minister for Women and Equality and the Government held an event—I want to say a bit of a do—at No. 11 Downing street for women from across the country, who gave evidence about their experience of what the recession is doing to women. That is clearly a major concern, but I did not hear anything in the section of the Budget about helping people fairly that would give direct help to women in the circumstances that I have mentioned.

There is also a danger that in the recruitment process employers might favour applicants with no children. In an economic downturn, anybody with children is at a disadvantage if they apply for a job. According to the Equal Opportunities Commission in 2005, before it became part of the Equality and Human Rights Commission, 30,000 women a year were sacked for being pregnant. More recently, Nicola Brewer, the chief executive of the commission, said that women were not being employed because it was better for employers not to take them on, as they might open themselves up to the risk of further costs through maternity benefits. It will be terrible if our maternity benefits, which are relatively good although with room for improvement, become a cause of women not being able to access jobs. If the situation is bad now—that was a couple of months ago—we can expect that women will find it harder and harder.

Mr. Hayes: The hon. Lady makes an interesting point. Economists argue that extra costs to businesses through regulation are absorbed during periods of economic growth but exposed, as she argues, in times of economic downturn. Furthermore, they argue that when employers face tougher times, they take steps that they would not take in a period of growth. What measures would her party put in place to counteract that?

Lynne Featherstone: Much as I would like to discuss the measures that my party would put in place, I am actually discussing what the Government are going to do. My intention was to find out whether any direct help would be provided. A debate was held in the House about what would happen to women in an economic downturn, but I did not hear that reflected in the Government’s Budget.

The final matter that I wish to cover is youth. I very much welcome the Government’s proposal to guarantee every 18 to 24-year-old a job or training. The prospect of a whole generation of young people coming out of education, particularly tertiary education, to nothing is
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one of the most appalling aspects of the recession. The loss to an individual of confidence, skills and their future is unconscionable. Let us consider the effect on self-confidence of finding nothing after studying and hoping, and dreaming, of getting a good job. There is a great individual cost, and the loss of a generation of young people with ability, talent and skill to the whole of Great Britain would be immeasurable.

Steve Webb: Does my hon. Friend share my concern that the promise to which she refers will be implemented only after a year, which is long enough even to someone in middle age? It seems an absurdly long time. Does she agree that we can identify young people at high risk of being unemployed for a year almost on day one, and perhaps be more interventionist earlier?

Lynne Featherstone: My hon. Friend makes an interesting point. Indeed, I shall make almost the same point shortly.

Earlier this year, Martin Bright, who is the former political editor of the New Statesman, wrote a piece entitled, “A New Deal of the Mind”. I do not know how many hon. Members read it, but the Government were greatly interested and supported it. It was a truly visionary piece, which was about scooping up that potentially lost generation and creating a version of Franklin Roosevelt’s new deal of the 1930s. It is targeted more towards those leaving university or tertiary education so that a whole generation will not be lost. It would mean an army of young people employed on projects—the article also suggests using that army to do things that are not normally done—to record, write, film, photograph, design and archive aspects of our lives, the recession and living histories, thus creating a legacy from this era for future generations. They would document all the communities in our land—that does not get done in better times—while battling the scourge of unemployment in current times.

The article was so inspiring—I tell everyone to google “A New Deal of the Mind”—that it received much cross-party support. There was another bit of a do at No. 11 Downing street to launch the new deal of the mind— [Interruption.] I do not spend all my time at No. 11 Downing street. There was a stellar gathering, with the head of every artistic, musical and literary institute and organisation in this country present. I have never seen a guest list like it. They were all buying into the concept. The Secretary of State for Work and Pensions and the Secretary of State for Culture, Media and Sport were there and fully signed up to the ideal. The hon. Member for Wantage (Mr. Vaizey) also attended and spoke in support. I am sure that it will come as a relief to Conservative Members to know that support was not caveat free, but we all spoke in favour. The leader of my party also supports the new deal of the mind—it is simply a good idea.

Ideas included a brains trust for the 21st century, a national oral history taskforce, a national family history project and a new deal for art and drama. I have been so enthusiastic about the project since I first heard about it that I have been blogging about it. At the weekend, I visited another constituent, who happens to run a charity. He said, “You’re interested in this new deal of the mind—you’ve been blogging about it.” His charity is cataloguing oil paintings in public ownership in every county of the land. He said that if I could hook him up
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with new deal of the mind, he had an apprenticeship to offer in every county because a book of oil paintings in public ownership is produced for every county. Apart from local councils, there are many people who have a vision, want to help and could be harnessed in that way.

I hope that the new deal of the mind will be part of the Government’s guarantee. As my hon. Friend the Member for Northavon (Steve Webb) said, I do not understand why those projects cannot start from day one. The sooner people leaving college with nowhere to go get involved in that worthy and marvellous idea, the better. What part of the guaranteed budget will be used to ensure that all 18 to 24-year-olds will be in a job? How can it be accessed? How will it work? How much of that budget will go to a new deal of the mind? It is important to realise that vision, which has the hallmark of greatness. It will leave a legacy to this country for which everyone in years to come will be grateful.

8.45 pm

Mr. John Hayes (South Holland and The Deepings) (Con): It is a pleasure to follow the hon. Member for Hornsey and Wood Green (Lynne Featherstone), who brought a passion and an energy to her advocacy of the aesthetic aspect of what might be done to engage people usefully and purposefully.

How one responds to the Budget depends on how strongly one feels about the long run. I assert that the political class has become less concerned with the past and the future. The view of the past and the future among politicians has changed, as the here and now has predominated. The “want it all and want it now” culture, which has been fuelled by a “borrow and spend” paradigm, is bound to displace a proper consideration of the long run. Yet surely we know that the present is a momentary thing. We live our lives—do we not?—in the then and the when. Thus an emphasis on the long run is important for politicians and this House, and it is certainly important for the Government.

The Budget was couched in the language of Keynesianism and we heard something of Keynes from the right hon. Member for Oldham, West and Royton (Mr. Meacher), who made the best speech that we have heard in the debate today. It was Keynes who once famously declared:

However, Keynes, as his comments imply, had no children. I, on the other hand, have two young sons. I care desperately about their future and about that of their contemporaries—the children and grandchildren of my constituents in South Holland and The Deepings. That means that I care about the long run and about our duty to those who follow us, a duty that informs my conservatism. I prefer Edmund Burke to Keynes. It was Burke who said:

The Budget breaks that pact. It is the product of politicians and Ministers who are preoccupied by the present, largely ignorant of the past and careless of the future.

Of course the Chancellor is focusing on how to get through the next 12 months, but to do so he plans to borrow an incredible £175 billion, which is 12.5 per
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cent. of national income. We surely know across the House that we cannot go on spending for ever, but like St. Augustine, the Chancellor declares, “Lord make me chaste, but not yet.” He and the Prime Minister hope that the tough decisions can be delayed until after the general election and probably, therefore, taken by somebody else.

It is instructive in these circumstances to consider the crisis faced by the Labour Government in 1931. Then a Scottish Labour Prime Minister put country before party. Now a Scottish Prime Minister should do the same, yet the Budget burdens future generations with a mountain of debt. The Institute for Fiscal Studies has estimated that the national debt will return to sustainable levels in 2032, which is 23 years from now. That is not acceptable. I do not want to be excessively partisan—these debates are often too partisan—but in the end, when the Prime Minister speaks of a “decade of irresponsibility”, one has to reflect that he was the man, first as Chancellor and now as Prime Minister, who presided over the policies that fuelled that irresponsibility.

There was much in the Budget about housing. The Government’s policy on housing illustrates the sort of short-termism of which I am so critical. For me, the idea of a home is the emblem of my conservatism. To talk about housing is one thing; to talk of the home lifts us to a different emotional plane. The difference between a house and a home is like the difference between calling a parent a mum or an acquaintance a friend. The home stands at the bright centre of our lives. It is where lives start and end; it is where we return at the end of each day and at the end of all our days. Our hearts are where the home is. But there are far too many people in our country who either do not have a home or do not have the kind of home that they need and deserve.

Frustrated aspirations to home ownership and overcrowding are the painful symptoms of what is going wrong with Britain. The Government’s failure to tackle these problems helps to explain why social mobility has declined. To build a socially mobile, cohesive and socially just society, we need to help people find the homes that they need in the right places, yet we have wasted a decade of opportunities to do so.

Over the past decade or so, about 24,000 fewer homes a year have been built than under the tenure of the last Conservative Government, and house building has now shrunk to an historically low level. The Government have also failed to develop other methods—particularly share equity—to help people into the homes that they want. In the Budget, the Chancellor promised an extra £80 million for the HomeBuy Direct shared ownership scheme, but that will help a maximum of 10,000 buyers. Even in these grim times, about 10,000 new mortgages are approved per month for first-time buyers. So the sum of £80 million represents one month’s mortgage applications, so it is no wonder that experts have already dismissed the proposal as marginal.

More than five years ago, when I was the shadow Minister for housing, I published a paper proposing 33,000 new homes via HomeBuy, which was far more than the Government were delivering. If they had taken the Opposition’s advice then, and backed shared equity when house prices were rising, they could have generated
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receipts through sales that could have been recycled to provide further support, but instead we had far too little, far too late.

The same is true if we look at the Chancellor’s other proposals on housing. He promised £100 million for local authorities to build new energy-efficient housing, but experts say that that will pay for just 900 new homes at a time when 4.5 million people are on waiting lists for social housing. More than 28,000 people have lost their homes as a result of delays in the implementation of the home owners’ mortgage scheme, following its announcement last December. In February, the Prime Minister said that he would do everything in his power to stop repossessions, yet the Council of Mortgage Lenders estimates that there will be 75,000 repossessions this year alone, a rise of 67 per cent. on last year. Members will have seen the figures in today’s press which suggest that the repossession rate will continue to rise, and the frightening graph projecting a forecast of mortgage arrears that will undoubtedly lead to yet further repossessions.

I also want to say something about public debt. We face a future crippled by debt and, while the Prime Minister keeps talking about the global nature of this crisis, we should understand that we are alone in our present approach to debt. Of the G7 countries, not one other will countenance an increase in the level of debt such as that proposed in this Budget. Shockingly, the Office for National Statistics revealed this month that, in the financial year 2008-09, the public sector recorded a deficit of £52.3 billion. That public sector net debt, expressed as a percentage of gross domestic product, was 50.9 per cent. at the end of March 2009, compared with 43.1 per cent. at the end of March 2008. By 2013, total Government debt will rise to a staggering 79 per cent. of GDP. Across the EU, no other country is considering such a rapid rise in debt levels.

The International Monetary Fund report, “The State of Public Finances”, indicates that, from 2009 to 2014, we are alone in our reckless approach to borrowing. Germany’s debt will rise from 76.1 to 77.2 per cent., and Spain’s will rise from 48.6 to 56.3 per cent. Even for Italy, a country that is no stranger to borrowing, the IMF predicts a rise of under 10 per cent. across the same period.

The circumstances to be found more widely across the world are even more alarming. China’s debt will fall, as will that of Brazil. Indeed, the IMF’s “World Economic Outlook” indicates that world public debt, including that of vast numbers of developing economies, will only rise from 61 per cent. in 2008 to 71 per cent. in 2014. All of this risks our competitiveness, productivity and prudence.

I am not an economic liberal. Indeed, I am not a liberal at all. It is one of the destructive products of the orthodox acceptance of liberalism that we have come to regard individuals and their will as being more important than the history that precedes them, the coming generations that they spawn or the families and communities rich in values and ideas that nurture them. So I am not an economic liberal and have no problem in principle with the role of government in mitigating the excesses of the state of nature. But I am a fiscal conservative. The reason for my being so is that I believe in the long run and the long term—what we see in this Budget and in the Government’s economic policies is what happens if one does not. Rather than prepare for the future, the
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Government built their economic programme on two things—high levels of public debt and private borrowing, and high levels of public expenditure—which in the end could not be sustained.

Those are the things that fuelled our economy for more than 10 years. They emphasise the material, the immediate and the individual, but what really counts is the permanent, the communal and the prudent, and it seems to me that the day of reckoning has now come. Good parents want the best for their children—as I said, I want the best for mine—and they must despair, as I do, when they read that their children will have to pay for the decisions that we are going to take today. If we want to give our children the best possible chance in life, the opportunities to succeed regardless of from where they start and the chance to live in a home of their own in a strong, cohesive community, we need public policy that focuses on the long term, we need politicians who are prepared to sacrifice the immediate interest for something greater, better and more strategic, and we need a Government who care about the long run.


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