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25 Mar 2010 : Column 449

My hon. Friend the Member for Sevenoaks (Mr. Fallon) made a wonderful speech-it was short and to the point-and we should take a great deal of encouragement from, and listen to, his expertise. I think people want us to recognise the problem that we are facing and to say how we are going to sort it out. I put this question to those on the Treasury Bench: can they look me in the face and say they would have delivered the same Budget if an election were not looming? That is the honesty that I would like. If there were another two years of this Parliament to run-God help us-they would not have delivered that Budget. We would not have been told, "We'll come back to the problem in a couple of months." That is the disservice that they have done not only to the country or businesses but to every person in the country.

I received a letter today from Mr. Robert Fowler, managing director of Maygray in my constituency. His business rates bill has obviously just arrived, and he wanted me to know that there has been

in his rates. That is the reality that businesses face. We in this House can all pontificate and talk about the wonderful schemes, but the reality for most people is far different. I am afraid to say that many in this House have no idea about business-I would say that many have no idea of the real world, but that would be unfair, because we all return home to the real world every night-and that knowledge of what makes business work is an increasingly rare commodity here. Mr. Fowler asked me what I would do if the bank manager came to me and asked what I was going to do about my overdraft. If I followed the Chancellor's advice, I would say, "I'll write you a cheque. Will that sort it out?" It would be as simple as that.

Last Friday, I visited Hale Hamilton Valves, a business in my constituency. I have travelled past its premises nearly all my life, which are known mostly in my area for the wonderful magnolia that comes out at this time of year-everybody recognises it. The business, which makes valves and things for submarines, is wonderful. The people at that firm told me about the difficulty they had in getting people in as apprentices, because that sort of work is not recognised. For all that we welcome the university places-although, as my hon. Friend the Member for Tatton (Mr. Osborne) said, funding for those is for only one year, which seems slightly pointless-the Government could do something just by increasing the status of engineers and technical qualifications.

We have heard about the banks today. Many people have complained to me that they are not getting the finance that they need, despite the taxpayers' money that has been put into the banks, but my business has been lucky. I pay tribute to bankers-not to those who were the architects of the problems but to the ordinary people working in banks. Like people in this House, people who work in banks have received a great deal of abuse. I have heard about that from various friends and acquaintances and from my bank manager, who says that he does not want to go down to the local pub because he will get all the banking jokes-and we can all recognise some similarity with our own position. I would like to thank people who work in banks, who have been very supportive but whose own jobs are under threat because of the actions of some.


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I have some good news. The London borough of Hillingdon, where I have lived all my life, was almost bankrupt, but the Conservative administration has turned it round. It can be done, and Conservatives can do it. With all sincerity and from the bottom of my heart, I pray that this is the last Labour Budget that I have to endure for a long time. This Prime Minister, both as Prime Minister and as Chancellor, will-if we have any more of this wretched Government-have achieved what two world wars, the great depression and many other things that my company has faced over the century could not, because we cannot continue in this environment any more. It is no good saying that people are exaggerating: businesses are on their knees because of this Government. We wanted a Budget, but we got a fudge-it.

3.58 pm

Mr. William Bain (Glasgow, North-East) (Lab): It is a pleasure to follow the hon. Member for Uxbridge (Mr. Randall). Like me, he came to the House as a result of a by-election. I believe that his was towards the beginning of a Parliament, while mine was towards the end of this Parliament.

This is my first Budget debate and I wish to pay tribute to those right hon. and hon. Members for whom this will be their last Budget debate. I thank my hon. Friend the Member for Leyton and Wanstead (Harry Cohen), my hon. Friend the Economic Secretary to the Treasury, who will speak later and the hon. Member for Macclesfield (Sir Nicholas Winterton), who made an exceptional speech. He had an alternative economic policy and a strategy for jobs and manufacturing-indeed everything that was missing from the speech by the shadow Chancellor. To coin a phrase used by the Leader of the Opposition, the shadow Chancellor today was an analogue shadow Chancellor for a digital debate.

I also wish to thank my right hon. Friend the Member for West Dunbartonshire (John McFall), who spoke in the debate yesterday. It was a pleasure to listen to his valedictory speech. His work as a Minister and as a two-term Chair of the Treasury Committee has made a huge difference on issues such the regulation of credit and the banking sector and, on this side of the House, we will miss his contributions greatly.

This is a good Budget for Glasgow, Scotland and the UK. It prepares us for the new jobs upon which our future economic prosperity will depend; it sets the country on a path of fiscal consolidation that will not be damaging to growth, employment or our social fabric; it protects vital investment in the front-line public services on which we rely; and in its fiscal measures it reflects a greater sense of fairness.

A few weeks ago, I had the opportunity to read a book by the Nobel prize-winning economist, Joseph Stiglitz, entitled "Freefall". The book argues that economic growth in both the United States and Europe remains anaemic, and given forecasts for private sector growth, and in the absence of continued Government support, there is the risk of continued stagnation. He emphasises that growth is too weak in the private sector to return unemployment to normal levels soon.

When Professor Stiglitz visited London recently, he said that the debate was really about the economics of Keynesianism against the economics of Hooverism,
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and there is further support for his arguments in the recent OECD economic outlook report published on 27 February. It states:

It continues:

It concludes:

I agree strongly with that approach.

Let us look at what has been done in the 18 months since things went badly wrong for the economy in 2008: the Centre for Economic and Business Research has stated that quantitative easing has added about 2 to 3 per cent. to gross domestic product; the automatic stabilisers that have been introduced have given, and will give, a fiscal boost of 4 per cent. in the next tax year; and it is estimated that the fiscal stimulus in the 2008 pre-Budget report prevented GDP from falling by 0.5 per cent. in 2008-09. Furthermore, today, at its lunch-time seminar, the Institute for Fiscal Studies downgraded the structural deficit and said that it is now £67 billion rather than £73 billion. I support the Government's efforts to get the deficit down to 5.9 per cent. of GDP by 2014-15. Doing it that way is right and does not sacrifice jobs. Let us also consider the record of all the G7 nations: the UK has the most ambitious deficit reduction strategy. It is more ambitious than that of Germany, Canada, the United States, Japan, France and Italy.

One of the key reasons why I stood for office was to tackle unemployment, and I am pleased that in the UK, at 7.8 per cent, unemployment is 2 per cent. lower than in the eurozone and 2 per cent. lower than in the United States. However, my constituency has suffered from an increase in unemployment in the past 12 months-it has risen by 901-so the measures on extending the jobs guarantee for 18 to 24-year-olds until 2012 are particularly important. Two weeks ago, I met about 20 young people in the Royal Strathclyde Blindcraft Industries factory in Springburn in my constituency. They had all come off the unemployment register thanks to future jobs fund investment, they were all learning a new set of skills in manufacturing and construction, and they had all had their lives turned around. They will be a great asset to Glasgow's economic future.

Tomorrow I am hosting a jobs summit in my constituency, bringing together businesses, trade unions, CBI Scotland, the local chamber of commerce and public sector employers, as well as voluntary and third sector employers, because the challenge that we face in diversifying our economy is one that neither the private sector nor the Government can face alone. Rather, this must happen through the public and private sectors working together. That is why the role of the new green investment bank in driving future growth and employment in environmentally sustainable industries, with a £2 billion investment, is so crucial. I know that in Scotland, with offshore wind and investment in the digital and creative
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industries, the scheme will create thousands of new jobs. The Government therefore have a role in recalibrating our economy; they cannot simply stand aside and set a fiscal framework. A decent society needs an active, but not an overpowering state.

If we maintain the current course, I hope that the UK will be able to match the levels of investment in research and development that countries such as South Korea, Germany and Sweden reached in previous decades; because it is through high-level manufacturing, the creative industries and low-carbon technology that we can permanently replace some of the output that was lost in the recession. My right hon. Friends the Prime Minister and the Secretary of State for Scotland recently visited the Allied Vehicles plant in my constituency, which is involved in manufacturing zero-carbon vehicles powered by electricity. I welcome the fact that the Budget increases capital allowances for forward-looking companies such as Allied Vehicles, which employs 350 people in an area of economic deprivation in Glasgow, North-East.

I also welcome yesterday's publication of a document by the Treasury on progressing towards the 2020 target of abolishing child poverty, which puts the role of work and making work pay at centre stage. There are 500,000 children in this country who are out of poverty because of the policies followed by this Government, while around 9,500 families in my constituency benefit from child tax credit. The increase of £4 a week in child tax credit for families with a one or two-year-old child will help around 65,000 families in Scotland. Across the UK in 2007 and 2008, there were 700,000 children in low-income families where only one adult was in work, while 43 per cent. of children were in families described as "working poor". There is therefore much to be done, through increasing employment opportunities of the kind that will help families with child care responsibilities and ensuring that people are demonstrably better off in employment than on benefits. A rising minimum wage over the next five years would greatly assist in that too.

This is a Budget that I hope will have the support of my colleagues on the Labour Benches on Tuesday, and I hope that all of us will argue for the support of the country for it in the coming months.

4.8 pm

Bill Wiggin (Leominster) (Con): I was delighted to listen to the speech by my hon. Friend the Member for Tatton (Mr. Osborne), who opposed the duty on cider. That is exceptionally important, because cider has been a success story and has a tremendous history of growth in recent years.

Herefordshire is the country's cider-making heartland. The United Kingdom produces around 130 million gallons of cider a year, and half of that comes from Herefordshire. One billion pints of cider are sold every year. There are tremendous environmental benefits to cider production: 2 million new apple trees have been planted since the mid-1990s, with 9,500 acres of cider orchards in Herefordshire. Forty-five per cent. of the apples grown in this country are used for making cider. There are more than 1,000 people directly employed in cider making and 5,000 indirectly employed. There is a wider value to the rural economy.

Mr. Randall: As my hon. Friend knows, I am a great supporter of cider, and I have noticed from some of the bottles in this place that the Wildlife Trusts are working
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in conjunction with cider makers because of that advantage to the environment, which I hope will not be lost with the increase in tax.

Bill Wiggin: I am grateful to my hon. Friend for that intervention, and I congratulate him on the excellent speech that he made earlier. He is right to point out the benefits of orcharding, as it is called, and to say that the habitats that can be created in cider orchards are enormously environmentally helpful, positive and creative. Some wonderful and very rare animals and, particularly, beetles can only be found living on apple trees. And where would we be without mistletoe at Christmas time? Most of that comes from Herefordshire and Worcestershire. It is not possible to grow orchards quickly; they take years to mature. They can also take a variety of forms, including bush orchards and standard orchards. I hope that this savage increase in duty-10 per cent. above inflation, making a total of 13 per cent., which represents a disproportionate attack on the industry-will not have the undesirable effect that my hon. Friend has mentioned.

I want to talk about the fragility of the cider market. Hon. Members will remember the golden days of cider being triggered by the Magners television campaign, which encouraged people to add ice to cider. That resulted in a tremendous lift across all the different brands, but the industry is still fragile, as is its growth. Many of the new producers are hobbyists, or small producers who are expanding, and they need to be supported, not forced to bear the brunt of the Government's tax plans.

It is a great shame that the Government have chosen to penalise this industry. Duty on cider has increased by 20 per cent. in the past two years, and it is now being increased by a further 10 per cent. over and above inflation, making a total of 13 per cent. The lower increase in duty on beer will always adversely affect cider sales, as there is a substitution effect. That is not the case, however, when it comes to making cider.

People think that the way in which cider is made involves taking the apples and crushing them to press the juice out, then fermenting the juice, preferably in oak barrels, until it is fully fermented. It is then aged, bottled and sold. The process is very different, however, for the own-label white cider sold in supermarkets. The alcohol is created from sugar-type syrups, and the alcoholic liquor is then mixed with apple juice, apple flavouring or apple concentrate. It can then be sold as cider. It is that highly alcoholic, low-cost drink that is causing some of the antisocial behaviour problems that bother us all, and it is a great shame that it carries the name "cider". The fruit juice content is the key difference between the two.

I hope that whoever forms the next Government will stop attacking people who make cider out of apple juice in the traditional way, and focus instead on the problem drinks. My local policeman told me that he had seen young people in supermarkets turning bottles round to read the label, to ensure that they were getting the most units for their money. For them, it was not about what it tasted like; it was about what it did to them. That is not the sort of cider that I am talking about, and it is not the sort of cider that Herefordshire makes. The white cider known as Frosty Jack's is not produced there.


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The Government should focus their attention on dealing with the antisocial behaviour issues and stopping young people-and, perhaps, older people-drinking white cider and getting into a terrible state.

Simon Hughes rose-

Bill Wiggin: I shall give way to the hon. Gentleman, whose mother I believe used to live in Herefordshire.

Simon Hughes: And who moved to Herefordshire himself at the age of 18.

The hon. Gentleman will know that there is broad support not only across the House but among people with a Herefordian connection as well as those in the west country and elsewhere for his views on the importance of not giving cider a bad name unjustifiably, and of not treating a fragile and valuable industry unfairly. The cider industry has clearly been picked out in isolation from all the alcohol producers in this country. We will all want to persuade the incoming Government that the proposed change should not be sustained, and I hope that it will be able to be reversed in the near future.

Bill Wiggin: I agree with the hon. Gentleman, and I was encouraged by the comments of my hon. Friend the Member for Tatton when he said exactly what the hon. Gentleman would have wanted to hear-namely that this across-the-board attack on the cider industry is not supported on this side of the House. My next-door parliamentary neighbour, the hon. Member for Hereford (Mr. Keetch), also speaks strongly for the cider industry, so it is a shame that he is not in his place today. He will be leaving the House at the next election, so I hope he will use this particularly vicious attack on our constituents as an opportunity to speak in this debate before next Tuesday.

I would like to talk about something that happened last week. The Minister for Housing, the right hon. Member for Wentworth (John Healey), who I believe is the Government's pubs Minister, announced on 18 March 12 action points designed to support struggling pubs. Only a few days later, however, we see his Government attacking the key product that pubs are supposed to sell. It defies belief. We are losing five pubs a day. These duties will have an impact on the sale of cider.

I received an e-mail this morning from a publican in my constituency who runs the Crown inn at Woolhope, which prides itself on being one of the homes of Herefordshire cider and perry, stocking 18 types of cider all produced within 15 miles. This is locally produced cider being sold in a local pub to local people. That is the sort of model of sustainability that supports rural economies. It is something that the Government say should be encouraged, yet as soon as they get the opportunity, they torpedo all those good intentions with this savage increase in duty. That puts at risk the cider producers and apple growers, as well as the cider industry's strong and worthy efforts to improve not only environmental sustainability and local pubs, but higher standards of responsible drinking.

At the start of his statement yesterday, the Chancellor of the Exchequer said:


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What hollow words! This Budget and the cider duty increases do not correspond with those comments. The Chancellor also explained why this was being done:


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