Previous Section Index Home Page

Another economist, the late John Kenneth Galbraith, described this approach as the horse and sparrow philosophy. It was the thinking that if one needed to feed both a horse and a sparrow, one could simply feed as many oats as possible into the mouth of the horse. Some of it would eventually pass straight through and feed the sparrow on the ground. Galbraith simply pointed out that there were better ways of feeding sparrows. The same message needs to be passed to the Treasury and the Government today. There are better ways of feeding the sparrows who keep our manufacturing economy going than throwing money into the banks. Despite what we say in the Chamber about interest rates, if we talk to companies that are trying to get access to credit, we hear that they are currently facing charges of 14 to
29 Mar 2010 : Column 565
15 per cent. There is nothing like a near-zero interest rate in the real economy in which they are trying to survive.

Like the Secretary of State for Communities and Local Government, I believe that the focus needs to be on jobs, and I think it needs to be on green jobs. For a moment, I got really excited about the proposal to create a green investment bank. However, page 105 of the Red Book states that

That amounts to not spend-to-save but sell-to-loan, and on a scale that is pitifully unambitious.

We can look at the opportunities that were missed in the Budget. Since 1999, when the Government introduced individual savings accounts, 19 million people have put about £175 billion of their tax-free savings into ISAs. Yet we have never sought to direct what those ISAs could be used for. If we had made them conditional on green infrastructure investment, we could have had that £175 billion pot as a condition of the tax concessions we offered. We could have done exactly the same through conditions attached to pension tax relief. We could have said to the bank that we currently own, the Royal Bank of Scotland, that a defined percentage of its investments and lending had to be focused on the delivery of green infrastructure.

The reality across the international landscape is that other countries are driving their economic recovery, and job generation programmes, by taking themselves into a different space, post the crisis, from the one that they occupied before it happened. The Budget fails to follow those leads. Many years ago, my father tried to explain to me, in simple terms, that life is an economic money-go-round. One simply has to ask oneself where the money gets on, where it gets off and who walks off with it. The Budget fails to have the courage to redirect the money-go-round. It is the task of Government not to retreat from the large challenge of redirecting the money instead of arguing who should make do with less.

Let me give an example from Germany. Some time ago, I brought to the UK to meet UK Ministers a sophisticated, urbane politician called Hermann Scheer, the architect of Germany's feed-in tariff legislation. During the ministerial discussions, he was told, "That's all very interesting, but it's a heck of an expensive interventionist policy to pursue." He politely gave a cameo example to show that the exact opposite was true. He pointed out that the average German citizen spent €3,500 on annual energy costs in the home and the workplace. So the average German Lander-a county or region of about 1 million people-spent €3.5 billion each year on purchasing its energy. He said that most of the energy purchases came from external sources-third countries or multinationals. The money was thrown out of Germany's windows to enrich others.

Scheer explained that all they did was to change the way in which they thought about the money-go-round. They realised that by simply spending €3.5 billion a year-the same sum-on themselves, they could find a way out of the recession rather than digging themselves deeper into it. That sort of fundamental rethink about the workings of the money-go-round needs to find roots in this country, this Government and this House.

29 Mar 2010 : Column 566

Countries that pursue such a line find that they gain job security and economic security, that their Exchequer has increased tax revenues and that they get energy security. The same can apply to food policy and water security. However, it requires us to break away from the myth that interventionism is a pitfall for all Governments. I find it sad that we have inherited a fear of picking losers rather than winners. This has made us retreat behind an unstable and unconvincing belief that deregulated markets will take us out of, rather than drive us into, a crisis.

Sadly, it is certain that Conservative proposals would plunge us back into crisis and that the Labour Budget will not take us out of it. We need something more; something which will break the hold that speculative finance has on the UK economy. We need something to break the power the energy cartel has to define the short-term nature of the UK energy market and make incessant demands for corporate subsidies. We need something that intervenes to break the power of multi-commodity traders to undermine UK food security and define the basis of an unstable and unsustainable UK food policy. We need a Government who are unafraid to wrest power from the exploitative and unsustainable in favour of those who want their ecological footprint to be sustainable. Will we get that at the coming election? I suspect not.

I will not be part of the next Parliament. I am simply following my mentor, Tony Benn, who said that he was leaving Parliament to spend more time in politics. As a parting promise, I say to the House that I shall seek to be part of the social movements that ensure I am as much of a pain in the backside to this place from outside Parliament as I have tried to be inside Parliament. I hope to bring constructive discomfort to all those who stand in the way of the future that Britain needs.

6.54 pm

Mr. Charles Kennedy (Ross, Skye and Lochaber) (LD): Unlike the hon. Member for Nottingham, South (Alan Simpson), who has just concluded his contribution in characteristically robust and witty fashion, I will not follow the general trend of the debate by describing my speech as a valedictory address-I hope that it is not, as one who seeks re-election. Indeed, if God spares me for another 10 days or so, I can at least confidently state that this will not be my last contribution of the Parliament, because, for the first time in nearly 27 years, I have got Question 1 in Scotland Question Time immediately after the Easter recess.

Reflecting on the many and varied valedictory addresses to which the Chamber has been privileged to listen this evening, it has struck me that one's maiden speech is heard with indulgence and some affection and good will, that one's valedictory speech is heard with gained and earned respect and also some affection, and it is just the bit in between that can be sheer hell on the Floor of the House. We should probably all bear that in mind; it is a good corrective.

I want to contribute briefly, essentially from a constituency vantage point, and speak about one or two items in the Budget and their impact on my part of the country. In doing that, I recognise that the Budget is constrained through the financial circumstances and that its measures are liable to be frustrated because of
29 Mar 2010 : Column 567
parliamentary constraints. We all know that we will look for the real Budget-the real measures-in the comprehensive spending review and the voting decisions that are made in the next Parliament, whatever its arithmetic. The Budget has therefore been presented in that shade and is subject to recessionary and banking pressures that have been generated globally, particularly in the past 12 to 18 months.

Bashing the bankers has become as popular as bashing Members of Parliament-I say that on the day of a significant statement about the new expenses regime that will kick in for the next House of Commons. I believe that, even without the banking implosion, when this or any other country-but certainly our country, which remains an island economy, however much we are enmeshed in a welcome way in the single European market-hits tough times economically, although of course we need our banks and we need them to behave responsibly and properly, as they should have done, we essentially need to build our way out of recession. That means a viable and vibrant manufacturing base and an emphasis on construction, which can do so much to help kick-start or pick up the momentum of the economy in different parts of the country. That applies especially to a traditionally fragile economic area such as mine, which is on the periphery of the market and of the UK, as well as of the European Union, and is always destined to be-the highlands and islands of Scotland.

One need only consider current unemployment and what sector those who are unemployed were in when they last had a job to realise that the proportion in construction or construction-related activity was enormous. Of course, as the Secretary of State rightly said when he opened the debate, the spin-off benefits of new build in the housing sector and the knock-on effects are significant. I therefore hope that the changes in the Budget, for example, on stamp duty, will help the Scottish economy as much as the English economy, perhaps particularly that of the south-east of England, and give a lift to a more buoyant housing market, which will assist the movement of money and people and help release an increase in the wealth passing hands across the economy for the construction of new housing generally.

That will go a long way to help to lift unemployment in so many parts of the country, as will the more modest but much needed construction-related activity that has arisen not least because of the atrocious winter weather that we have suffered. I represent the second northernmost constituency on the mainland, and if I may say, those engaged in dealing with the severity of the snow that we faced this winter performed magnificently. That construction-related activity has arisen not only because of the recent weather, but there is a persistent problem because of underfunding, so I hope that the Scottish National party Government in Edinburgh will be constructive and responsible in their approach to the extra funding from the UK Exchequer. I hope that they will not-as is so often their wont-turn it into a political football between them and the Labour Government in London as to who can match whom for funding. The fact is that the road user and the individual citizen in Scotland, including in the highlands, is less concerned about who gives the stamp of approval for investment than about that investment getting through, so that there is a much-needed improvement in infrastructure.

29 Mar 2010 : Column 568

My second point-I am speaking wearing my informal hat as rector of the university of Glasgow, and I am perhaps not required to declare that as an interest-is on the welcome increase in spending on higher education. Last year, Lord Mandelson made announcements about sudden, dramatic and unanticipated cuts, but he is in danger of ditching centuries upon centuries of British history with regard to the university sector. I did a TV programme with him on Budget day last week, when he simply lectured the universities on how they must cut their cloth accordingly, find savings, do what they were told and the rest of it. Even Mrs. Thatcher did not talk about the universities in quite that way. They may frequently have irritated her, but she accepted that under the workings of our unwritten constitution, at the end of the day, they are supposed to be independent institutions, despite the fact that they rightly receive public subvention. Lord Mandelson does not appear to feel constrained even to the extent that Mrs. Thatcher did in her most modest moments.

Real-terms cuts have been announced for the Scottish universities. On the back of last week's Budget, the Scottish Funding Council announced that 20 Scottish institutions will receive a 1.2 per cent. increase in funding for 2009-10, but, as the National Union of Students Scotland and the University and College Union say, that represents a real-terms cut overall, which does not match what the SFC said on 18 March, which was that there has already been a cut of £573 million from this year's budget. Just as we need to invest in infrastructure, we need to invest in the future. There is a common consensus across the political spectrum that education, skilled training, innovation, science and research are going to be crucial for our country in the long term. The Government are therefore pursuing a false economy in the tertiary sector.

An innovative approach to the economy is demonstrated by the interesting proposals for the green bank, which are worthy of support. That could help further to kick-start our exploration of alternative strategies for economic renewal and maintenance of the economy generally, and it pushes the boat out further, not least in the energy sector. Scotland, including the highlands and islands, has so much to offer on renewables. I hope that the beginnings represented by the green bank will help to place my part of the country even more at the forefront of cutting-edge technologies for further generations.

Something else that helps to correct the inevitable geographic imbalance of my constituency-I referred to that earlier-is the arrival of broadband. The steps that the Government are taking to extend the scope and coverage of broadband are welcome, and the Prime Minister recently said that there will be 90-plus per cent. coverage, but lo and behold, my part of the country is one of the areas that will not be covered soon. That is despite the fact that it is one of the areas of the country most in need of the opportunity that broadband and super broadband provides to help to alleviate the in-built difficulties that we face in access to markets and consumers, and to give us the ability to compete on a level playing field.

Another feature of this Budget and so many before it-Labour and Conservative-is that the playing field is grossly distorted by the way in which fuel duty is applied in this country. Although the Chancellor is
29 Mar 2010 : Column 569
phasing the increase in three instalments from this year to the next, there is still-after years of reports, investigations and pleas from across the political spectrum -no recognition of the pressing difficulties caused by fuel duty in rural areas, where public transport is all too often not available, and where the motor vehicle is not a luxury item, but an absolutely social and economic necessity. In that way, I am afraid to say, the Budget falls well short.

The Budget will be a key issue in the coming weeks in our part of the country. Some measures are welcome, but there is so much more to campaign for.

7.6 pm

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): This will probably be the last speech I make in Parliament as the Member for Sheffield, Attercliffe. I do not intend to lose in the general election, but unfortunately the Electoral Commission, in its wisdom, decided to rename my seat Sheffield, South-East, which is rather disappointing. Although that is a technically accurate geographical description of the constituency, the Sheffield, Attercliffe constituency has existed since 1885-125 years-and I like the idea of continuing to use historical names. I am slightly disappointed about that, but I nevertheless hope to represent the constituency under its new name after the election.

There have been many speeches from right hon. and hon. Members who are leaving Parliament, and we wish them all well. I have enjoyed the companionship of my hon. Friend the Member for Nottingham, South (Alan Simpson), who has just left the Chamber, and I value his friendship. We have not always seen eye to eye or been on the same side of arguments, but we have certainly always been on the same side in the parliamentary football team, where we have enjoyed several games together.

I also want to comment on the contribution of the right hon. Member for Skipton and Ripon (Mr. Curry). Over the years, I have enjoyed many debates with him, both in the Chamber and in Committee. He did his best to argue the case for, and the cause of, local government when he was Local Government Minister. Many on the Government Benches have great respect for what he has achieved and how he has put his views forward, and for his great wealth of knowledge on local government, housing and planning. Unfortunately, his time as Minister was rather constrained by the yoke of Thatcherism, under which he laboured-he did not always agree with it-but we will be sorry to see him go. Before he does so, perhaps he could give a few tips on the real meaning of localism to one or two Conservative Front Benchers. I shall come to my right hon. Friend the Member for Sheffield, Central (Mr. Caborn) in a minute.

At a recent meeting of the Select Committee on Yorkshire and the Humber, regional representatives from the Federation of Small Businesses, the British Chambers of Commerce, the CBI and the Engineering Employers Federation were united in giving us two messages: first, that Yorkshire Forward, the regional development agency, is doing a good job in helping them through the recession, and that we should not get rid of it; and, secondly, that we should not start making cuts now, and that the recovery is too fragile and limited to run the risk of pushing them back into a double-dip
29 Mar 2010 : Column 570
recession. Industry and business made that argument clearly and with a united voice, and we ought to pay heed to it.

This morning, I visited a company called Birley Manufacturing. We talked briefly about the Budget, but also about the company's interest in the Government's long-term commitment to spending in certain areas. We often forget that public spending is not simply about jobs and service provision in the public sector; it is also important for private business. That company makes the skirts that go under high-speed trains and it has had a major programme of investment over the past few years, so it is important that it knows what the future holds for Government commitment to public investment in transport.

Sheffield is clearly having a difficult time in the recession, like the rest of the country, but we are not experiencing anything like what happened in the 1980s-the scenes of devastation and destruction, with 40,000 people losing their jobs in steel and engineering over a decade in the Lower Don valley, in my constituency and that of my right hon. Friend the Member for Sheffield, Central. Of course, there have been some redundancies, but there have also been some real success stories. My right hon. Friend mentioned Sheffield Forgemasters, which has seen a management buy-out with the workers owning a large percentage of the company. It is going from strength to strength, with 70 apprentices taken on. It is also making a multimillion pound investment in a major new forging press so that it can be a significant producer of parts for the new nuclear programme here and overseas. Some £80 million of Government assistance has been given. We should not return to old policies of supporting failure in business, but the Government should consider how we can enable successes, and Sheffield Forgemasters is a major success.

I congratulate the Secretary of State for Business, Innovation and Skills and Ministers in that Department, but I especially congratulate my right hon. Friend the Member for Sheffield, Central. He really underplayed his involvement, but if it had not been for his knowledge, understanding, commitment, drive and refusal to give up, that investment would not have been made and those jobs for the future in our advanced manufacturing sector-not only for Sheffield, but for the UK-would not have been secured.

Advanced manufacturing is the way forward for Sheffield and the UK. We should not forget that we are the sixth major manufacturing exporter in the world. When I went the other week to the advanced manufacturing park that my right hon. Friend mentioned, it was put to me very simply: "If the Chinese can produce goods with wage costs at 20 per cent. of ours, we have to be able to produce goods with a labour input of 20 per cent. of that of the Chinese." With ceramic cutting tools, machines can do a job in less than 20 per cent. of the time they used to take with the old tools, and that is how British manufacturing will move forward. The Government have to be part of that, and the advanced manufacturing park is supported by Yorkshire Forward with the university of Sheffield, Rolls-Royce, BAE Systems and Japanese machine tool companies all working together. That is the future, so that when we start producing new nuclear plant in this country, much of it will be made here.

Next Section Index Home Page