The Conservative party has not changed. Once again it wanted to turn its back, but this Labour Government would not turn our back. We know that unemployment is never a price worth paying, and we will not stop the help now because we know we are not yet out of the
woods. It is important to support the recovery, and not to put it at risk. In the '80s and '90s, unemployment rose for years after the recession finished. We are not prepared to let that happen. That is why this Budget is a Budget for growth, for jobs and for recovery, with more help for the unemployed to get back to work, such as by extending the future jobs fund and the youth guarantee. Those measures are helping thousands of young people into jobs, including 170,000 mainly youth jobs through the future jobs fund, which the Conservative party wants to abolish.
I have met some of the many young people across this country who are now beginning their jobs and getting some great career starts: a young man who has started work in theatre lighting in Wakefield; a young woman in Bedford who is working in a sports charity; a young woman in London who is training to be a housing officer; and a young man in York who told me that the work he is doing with Groundwork has inspired him to go into horticulture. [Interruption.] Thousands of young people have now started jobs through the future jobs fund. [Interruption.] Conservative Members can shout all they like, but their party wants to pull the plug on that funding and abolish the future jobs fund, and thereby tell more than 100,000 young people across the country to give up on their dreams and their chance of getting work. Conservative Members want to turn their backs on them. How dare they deny those young people a start in their career by not backing that funding and the support it gives young people to get back into jobs?
Yvette Cooper: I will give way to the hon. Lady if she can tell me what she is saying to the young people in her constituency who are starting jobs through the future jobs fund, given that she wants to cut their jobs.
Mrs. Laing: I thank the right hon. Lady for giving way, and I will tell her what I say to the people in my constituency. The picture she is painting suggests it is all okay out there, but in the real world in my constituency and across the country thousands of young people, and older people, are without jobs, and thousands of small businesses, to which people have dedicated their lives, have gone under. What I am telling them, and what I tell this House now, is that that is the fault of this Labour Government. The right hon. Lady is speaking as though she had not been in government for 13 years, but people out there in the real world know it is the fault of the Labour Government, and she must stop pretending.
Well, the hon. Lady can muster as much righteous indignation as she likes, but she should tell her constituents that she wants to cut the help for those young people to get into jobs and for those businesses by enabling them to pay their tax over a longer period. That is her party's policy. Faced with the biggest global recession for many generations, with the collapse in global trade, and with banks in every country in the world near collapse, what does the hon. Lady's party want to do? It wants to cut the funding and support for people and businesses in her constituency, and for young people seeking jobs. I hope she is honest enough to tell her constituents how her party would pull the rug out from underneath them just when they
are trying to get back on their feet, and just when they are trying to build the recovery. The youth claimant count has now fallen for four months running, yet in the 1980s it increased for four years after the recession finished.
Mr. Gauke: May I just seek some clarity from the right hon. Lady? She has just talked about the Conservatives cutting the help for young people and people trying to get into work. Will she therefore explain figure 10 of the Budget policy decisions on page 120 of the Red Book, which states that "Reprioritised spending from DWP" is a cut of £475 million?
Yvette Cooper: We are increasing the funding for the youth unemployed- [Interruption.] No, we are increasing that funding next year; we are increasing the number of jobs that we are providing for them.
Yvette Cooper: Let me tell the hon. Gentleman what is happening. As a result of the unemployment figure being about 500,000 lower than we expected this time last year-which is a result of our policies and our investment that his party opposed-fewer people are reaching long-term unemployment and fewer people are needing support from the flexible new deal, and because of that we are able to extend, not cut, the future jobs fund and increase the number of places under it. We are able to do that because we have got more people back to work. The Conservative party has opposed every single penny of this, which shows their complete lack of support for the unemployed. That is why their stance is so disingenuous.
The hon. Gentleman should understand that we are spending about £2 billion in additional funding for the unemployed as a result of- [Interruption.] This year, in 2009-10, we are spending about £2 billion in additional funding. In 2010-11, we will increase that: we will spend more than the £2 billion in additional funding. We were initially allocated up to £3 billion, but we will not need to spend all of that £3 billion in 2010-11 because unemployment is lower, so we will be able to spend more in 2011-12. That still amounts to an increase in investment next year compared with this year, at a time when Conservative Members want to cut the funding. They want to cut it, whereas we want to increase it next year compared with this, and the truth is that they would not have spent any of it anyway. They would not have spent a single penny of it, because they oppose every penny of that extra £5 billion, as it was
part of the fiscal stimulus and extra discretionary support for the economy, but it has helped us to save money by getting unemployment down.
Kelvin Hopkins (Luton, North) (Lab): I entirely agree with what my right hon. Friend is saying, and I urge her to ignore the economic illiteracy on the Opposition Benches. Is it not simply the case that savage cuts in public spending now would drive up unemployment and drive us into a depression? Is that really what the Conservatives want?
Yvette Cooper: My hon. Friend is right; that is what is at stake here. This is what is at risk: a serious cut in spending could lead to a double-dip recession and the kind of stagnation that Japan experienced many years ago. My party is determined to avoid such problems.
This is not just about the action to help the unemployed; it is about the support for businesses. It is about helping businesses to extend their time to pay; about cutting business rates for a year for small business; and about our increases in tax breaks for business. Astonishingly, the Conservatives want to abolish those: so much for helping private business to invest and grow. The Conservatives actually want to penalise the businesses that are investing most: so much for helping to rebalance the economy. The Conservatives want to hit manufacturing and yet create another windfall for the banks by cutting the capital allowances for the banks.
What we should be doing is following the proposals that the Government have set out by providing the support for the high-tech infrastructure of the future, including digital, high-speed rail and offshore wind, introducing the stamp duty cuts for first-time buyers funded from the most expensive homes, and keeping up public spending and public investment while the recovery strengthens. The Conservatives say that we cannot afford to do this-the truth is that we cannot afford not to do it. That is because the changes that we have made and the investment that we have already put in to help people back to work has already paid off: unemployment is already about 500,000 lower than was expected this time last year, and that has saved about £15 billion over the next five years. Getting the economy growing and getting unemployment falling saves money, saves livelihoods and saves people's futures.
What did the hon. Member for Tatton want? He wanted the cuts that put at risk the recovery and that risk a double-dip recession. He wants to cut public spending, just as the Conservatives did in the '80s and '90s recessions, both during the recessions and in the early periods of recovery. That is why unemployment kept rising in the '80s and '90s for months and years after the recessions finished. We are talking about cuts that would cost us more for years to come.
Christopher Fraser (South-West Norfolk) (Con): Could the right hon. Lady explain why long-term unemployment is still rising and is at its highest level since 1997? The latest figures show that the employment level has fallen and is at its lowest for 14 years.
We are coming out of the deepest world recession for very many generations, and of course it has hit employment. However, the level of employment is still higher than it was in 1997 and we have seen the
first falls in unemployment much earlier than was the case in previous recessions. I hope that the hon. Gentleman will welcome the 440 future jobs fund jobs in his region, but I am sorry if he wants his party to cut them back and to cut that support for young people.
We must ensure that we bring borrowing down in future, once the economy is growing. That is why this Budget sets out a clear plan to cut the deficit, by more than halving it over four years and cutting the structural deficit by two thirds over the course of the Parliament. No other Government in the world have set out such a detailed plan.
Kelvin Hopkins: I wish to continue my right hon. Friend's theme. I am old enough to remember the 1979 election when the Conservatives came into office. They immediately pushed the VAT rate up from 8 to 15 per cent., raised interest rates, created 3 million unemployed and destroyed a fifth of our manufacturing industry. That is what the people face if they vote for the Conservative party next time.
Yvette Cooper: That is correct. My hon. Friend is right to say that it was not simply about the recession itself, but about the damage that the Conservatives did for many years afterwards in the way they responded to the recession by turning their backs on people at that time.
Our proposals will cut the deficit in three ways: through growth; through tax; and through tighter spending. The Conservatives curiously appear to be opposed to all three of those. First, we know that they are backing less growth and that they want less tax. They are silent on where they will find any spending squeeze, and they still want to cut borrowing further and faster. They talk about credibility, yet if they went into the jobcentre with sums like that we would send them on a basic numeracy course; their figures simply do not stack up. Their approach would put growth at risk by cutting support when the economy needs it most.
Secondly, the Conservatives oppose many of the tax measures that we need. The Government have set out plans for £19 billion in tax increases in order to bring the deficit down. That is a tough thing to do and it is a responsible thing to do to bring the deficit down, but yesterday the Conservative leader attacked every one of those tax increases. The Conservatives have not proposed a single tax measure to bring the deficit down, so perhaps they could tell us now whether they support or oppose the tax action that we are taking and whether or not they are prepared to put forward tax measures, which are difficult, in order to ensure that borrowing is brought back down.
The hon. Member for Tatton talks about a bank tax, but he knows that that is completely undeliverable in a single country and he has not talked about any possible measures that will make a real difference in helping to bring the deficit down. The Conservatives need to tell
us whether they support the national insurance increase, whether they support the new top rate of tax and whether they support the cut in tax relief on top pensions. There is silence from the Conservative Members, yet they will not say what they would do instead.
As for the claims made by the hon. Member for Tatton about personal allowances, either he does not understand how upratings work or he has been deliberately misleading and disingenuous-or perhaps he just wants to spend an extra £2 billion out of the blue. On any of those counts, he is not fit to be Chancellor. Personal allowances and benefits have been uprated with the autumn inflation figures since the late '70s. Changes in prices after that are picked up in the following year's ratings. In some years, by the time spring is reached inflation has decreased since the autumn measure, as it did substantially last year. If Conservative Members are saying that allowances should be uprated by more this year, I presume they also think that allowances should have been cut last year-they were not.
Let us consider what has happened over the past two years. Some 22 million basic-rate taxpayers are paying £145 less in real terms, on average, compared with the situation in April 2008. If Conservative Members suddenly want to ditch the decades-old way in which allowances have been calculated, they should tell people how they are prepared to pay the one-off £2 billion cost of changing the system this year. Once again, they say that they want borrowing to be lower, but they also somehow want magic money to pay for tax cuts too. They never face up to the serious consequences of these decisions; all we get is the political posturing, never the serious decision making.
Thirdly, despite the Conservatives' rhetoric, they will not sign up to any spending squeezes. They say that they want to cut further and faster, but they will not tell us any serious measures to bring spending down. They complain that we should set out more detail for 2013, but they will not even say what they will do in 2010. They say that they will make cuts in 2010, yet the next financial year is just 11 days away.
The hon. Member for Tatton says that he does not have enough information to set out his proposals for 2010-11, but we set out our spending plans for 2010-11 in 2007. How long does he need? How much information does he need in order to be able to tell us where he wants to find cuts in next year's money? Next year's money is part of the existing comprehensive spending review. We set out those plans many years ago, yet his party still cannot work out what it wants to do with next year's money-with just 11 days to go, the Conservatives still cannot work it out. They cannot work it out because they are not prepared to be serious and because they are probably hiding something. To be fair to the hon. Member for Tatton, I think he is probably quite good at cutting numbers-after all, under his election campaign leadership he has certainly cut his party's lead dramatically-but he will not tell us what he wants to cut in public spending, because he will not face up to the real decisions that Chancellors need to make in practice.
What have the Conservatives said they will do? They have said that they will increase the state pension age for the over-50s-that would not save them any money for years, but it would force people in their 50s to rip up their retirement plans and it would cost men in their 50s
about £8,000. The Conservatives have said that they will cut the child tax credit and the child trust fund from families on more than £30,000 or more than £15,000 a year. That came just a few weeks after their leader promised
"the most family-friendly manifesto that any party has produced in British political history."
This is family friendly? We always knew that the Conservatives had a narrow view of "family", but this shows that they have a pretty sinister view of friendly too. I say to the Conservatives and the Liberal Democrats that they should rethink this. The Labour party set out yesterday- [Interruption.]
Yvette Cooper: This party is increasing child tax credit-in this Budget for one and two-year-olds-because we think that parents need more help and more choice when their children are young. We want to increase help for pensioners and families who need it in this Budget, even at a difficult time. We want to increase the child tax credit, but the Conservatives want to cut it and to bring back the married man's allowance instead. We want to help all parents of toddlers. We want to help the married mum, but we also want to help the widowed mum, the single mum, the divorced mum, the dads and the grandparents if they are looking after the children too. We want to help mums who go out to work part time or full time, not just those who stay at home, because we know that families come in all shapes and sizes, and that a toddler can run one ragged whatever form their family takes. That is why we will support all families and will not discriminate against the families that the Conservative party simply does not like.
We want to give more help to those on the lowest incomes, whereas the Conservatives want to give the most help to the married men on the highest pay. We support the child trust fund, because we think that kids should have the chance of some family savings and assets being put by on their behalf, and we want to help families to do that. The only thing that the Conservative party wants to offer to families who want to build up assets for their kids is a cut in inheritance tax on millionaires' estates. I should point out to the shadow Chancellor that, contrary to his own experience, there are not many families in Britain who are due to inherit a millionaire's estate.
The country faces a big choice-a serious plan for growth and deficit reduction from the Chancellor who has steered Britain through the banking crisis and the worst global recession for generations, or a set of political gimmicks from the student politicians who would put our country's future at risk. The Labour party will not put our country's future at risk, and I commend the Budget to the House.