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As my right hon. Friend the Member for South Shields (David Miliband) said last week on hearing the announcements, the champagne corks will indeed be popping in Japan and South Korea. The investment was not, as the Deputy Prime Minister would have us believe, set up in the dying days of the previous Government. I would testify anywhere, in any court in the land, that those negotiations had been going on for more than two and a half years, and they went through the most rigorous scrutiny possible. The scheme would not only have given value for money; it would have been of major strategic importance to the economic future of advanced manufacturing in the UK. Again as my right hon. Friend said, pulling the plug on that loan is a piece of gratuitous economic vandalism-but then again, what should one expect from a Tory party that almost completely destroyed steel making in south Yorkshire in the 1980s?
We heard a lot in the previous speech, by the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), about the importance to the economy of an export-led recovery. I completely agree with what he said, so why did his Government not put the money into Sheffield Forgemasters, as that was all about exports, the future of UK manufacturing and the rebalancing of the UK economy? They turned down the chance to help this economy to recover. They failed the challenge on grounds of- [Interruption.] Well, tell me what the grounds were-ideology, dogma, pressure from Sheffield Forgemasters' competitors to say no? We would like to hear about them.
If this is an example of the Government's investment strategy, we should all be worried. For a relatively small loan that carried a commercial rate of interest, the UK would have had a company capable of being at the forefront of the supply chain for the nuclear power industry. It would have created jobs not only in south Yorkshire, but throughout the country. It would have led to high-value exports and secured the future of high-value steelmaking in the UK. Crucially, I know from working with Corus, Forgemasters and Fox Wire in my constituency how important it is for UK steel to stay ahead of the game when it comes to skills and advanced technologies. We cannot compete with China and the rest of the Asian economy on low-value steel casting and steel forging, yet we are giving that advantage to our foreign competitors.
It is also of interest to note that on the day the plug was pulled on the Forgemasters loan, the Department for Business, Innovation and Skills confirmed the building of a research ship for £75 million. There is nothing wrong with that investment, and I will support it, but the ship will be built in Spain because there are no longer any British yards capable of building it. The Tory Government of the 1980s decided that investment in shipbuilding was a waste of resources.
We should add to all this the fact that this Government have pulled the future jobs fund and slashed university places by 10,000. The hon. Member for Bournemouth East (Mr Ellwood) mentioned earlier that he had a relatively elderly constituency. Well, I have a lot of young people in my constituency, and they are worried about whether they will get the places they are looking for in the university system over the next five years or so.
David Morris (Morecambe and Lunesdale) (Con):
We are having a history lesson in here, but I think you would agree with me that every time there have been
cuts like those in yesterday's Budget, they have always been on the back of a Labour Government who have brought the country to its knees. I originate from an area similar to your constituency, and I lived in a community that was depleted by the miners' strike. I saw exactly what it did to my community, but what has to be addressed here is the fact that that was then, but this is now. This country is on its knees as a result of the Labour Administration. You are in complete denial that this has happened. It has taken a coalition Government with a Conservative Prime Minister to try to put some equilibrium back into the country and into the politics of this House.
Madam Deputy Speaker: Order. I want to be helpful to the Chamber by explaining that when hon. Members make their contributions, they address the Chair. When hon. Members say "you", they mean the occupant of Chair-and according to parliamentary convention, the Chair should not be blamed for everything. Also, interventions should be brief.
Angela Smith: Thank you, Madam Deputy Speaker. All that I would say about the hon. Gentleman's intervention is that the recession was caused by the collapse of the global economy, and principally by the bankers. If the hon. Gentleman would like to come and have a look at the ex-mining and ex-steelworking areas of my constituency, I could show him how much progress was being made in repairing the damage and how much that repair is now at risk because of the policies pursued by this Government.
I fear the worst for the young of our country. The 1980s saw the creation of a lost generation, and we are still feeling the effects. I believe this coalition will create yet another lost generation. I fear for the poor, the sick, the unemployed, the elderly and the hard-working public sector. Now we are getting to know just what the "big society" is all about. It is about an ideological drive towards a US-style small state; it is about people being left on their own; it is about the poor and the disadvantaged being left to help themselves; it is a return to the days we thought had been left far behind when the previous Tory Government left office. The only surprise is that this time they are being aided and abetted by the Lib Dems. That just goes to show that, as we have always suspected in south Yorkshire, the Lib Dems are yellow Tories at heart.
Increasingly, when I look at the Lib Dems in government, I am reminded of George Orwell's "Animal Farm". The pigs, led by Napoleon, campaign for an overthrow of the old politics on the farm. Gradually, however, the pigs morph into the humans they once despised, and their slogan of "Four legs good, two legs bad" changes to "Four legs good, two legs better". In Sheffield, we are all aware that our Napoleon has started walking on two legs. The Deputy Prime Minister is a Tory in all but name, and we fear the consequences of his betrayal for our economy, both regionally and nationally. He should hang his head in shame.
Mr David Evennett (Bexleyheath and Crayford) (Con):
May I welcome you to the Chair, Madam Deputy Speaker? I am grateful for the opportunity to contribute to this vital debate, which has been interesting and
lively. I congratulate my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) on an excellent, effective maiden speech, and I look forward to hearing more from him in the future. I also congratulate my hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Bournemouth East (Mr Ellwood) on constructive, thoughtful and progressive speeches, which addressed the problems facing our country.
I am disappointed by the hon. Member for Penistone and Stocksbridge (Angela Smith) and some of her colleagues who seem to think that there is a right-wing ideological agenda. The Budget has a practical, realistic approach, from a coalition Government who are determined to get our country out of the economic mess in which the Labour Government left us. We will not forget that, and we will take no lessons from them about the situation in which we find ourselves. Many of us would prefer not to have to take some of the measures in the Budget, but the 13 wasted years under Labour have resulted in a real mess.
I am disappointed that the hon. Member for Ogmore (Huw Irranca-Davies) is no longer in his place, because his was a constructive and passionate speech. I say to him and to Labour Members, including those on the Front Bench, that most of us came into politics to improve the condition of everybody in society, not just one section of it. We are determined to look after the disadvantaged and to help the less well-off, the disabled, pensioners and those in real need, but to do that we must have a strong economy and money to invest in such services. It is regrettable that the Labour party destroyed our economy and the opportunities for many people. I agree with the comment that most Labour Members who have spoken seem to be in denial about the problems that they have created and the situation in which we find ourselves. They keep on with the mantra, "It is a world situation" and so on. Of course, there is a world recession, but it was made worse by the incompetence of the Labour Government and their failure to deal with the issues early enough and to take the necessary measures to ensure that we could weather the storm. The consequences are a disaster for the whole country. History lessons will not do when we have had 13 wasted years.
My right hon. Friend the Business Secretary made a progressive, rational and measured speech and explained to us all his thinking and how he has come to his decisions. We value that, because he has looked at the facts and figures and made a reasonable judgment accordingly. I also congratulate my right hon. Friend the Chancellor on a positive and constructive Budget in very difficult times. It was positive in its aims and objectives, based on fairness and reasonableness, and in its twin approach of dealing with the debt problems and planning for the future.
Having been a Member of the previous Parliament, I also welcome the Chancellor's candour, openness and clarity about the situation in which the country finds itself. How different this was from Budget statements under the last Government. Those were all spin and propaganda, and Members had to leave the Chamber and read all the minutiae in the small print to find out what they really meant. Yesterday the Chancellor of the Exchequer was open and frank, telling the people about the problems and what needed to be done about them. He did not conceal the facts in the small print or hide them away in other paperwork.
After 13 years of Labour government, our economy has been shattered by mismanagement. We have a huge public debt and great unfairness in the tax system, and businesses, particularly small businesses, feel battered and bruised. We really do need a new approach and a new direction. Yes, the Budget is tough and austere, but it is also necessary and fair, and it is unfortunately unavoidable because of the position in which we find ourselves. We need a decisive breach with the past so that we can build facilities and services for the less advantaged and the most disadvantaged, such as those who are sick and will need more help in the future.
I want to concentrate on enterprise, pensions and training. As a Conservative, I believe passionately in lower taxation, and I am pleased that my right hon. Friend the Chancellor of the Exchequer also aspires to achieve that goal-when the time is right. When the time is not right, we must increase taxation, however hard that may be, in order to balance the books. I know that my constituents will appreciate my right hon. Friend's approach, because after 13 years of Labour they feel that they have been over-taxed and over-regulated, and that there has been too much bureaucracy and red tape and not enough support for their business activities.
My constituents have experienced the problems of increasing unemployment and economic inactivity, and most of them feel that bureaucracy and taxation have been excessive. Regrettably, those problems must be addressed with vim and vigour. Local business men tell me that central Government support was inadequate during the recession, and that publicly owned banks were unhelpful when they applied for credit or assistance. They were cast adrift by a Government who said wonderful things in the House, but did not follow them up with real measures to help small businesses make the wealth on which our country depends. It was clear that action by the new Government was urgently required to deal with that on all fronts.
The Government have already cut £6 billion of spending because we cannot afford it. If we are to create jobs and growth, it is vital that we help the small and medium-sized businesses that are at the heart of our economy. We need to show that Britain is open for business, and attract firms into the United Kingdom. We need reforms of tax and regulation to make it less costly and bureaucratic to run or start a business. We need to shift the balance in our economy back towards private enterprise, rather than the public sector dependency that we saw during those 13 years of Labour government.
I agree with the hon. Member for Penistone and Stocksbridge that the public sector has a vital role to play, and that it can create wealth and opportunities. Most wealth, however, is created by the small and medium-sized businesses which pay the tax and allow us to spend the money that we need to spend on our vital public services. I am amazed at the increase in public sector pay and pensions over the past decade. We would surely expect the Prime Minister to have a higher salary than anyone else in the public sector, and when we see that people at the BBC and in some local authorities are being paid considerably more by the taxpayer for doing a less demanding job, we have to ask what has gone wrong.
We also need to deal with the problem of waste. The hon. Lady mentioned regional development agencies, an issue that I raised with the Prime Minister at Question
Time last week. Although some RDAs have done a good job, others have wasted money in their bureaucratic way. We have heard about extravagances and expenses that have been in no way connected with the job that those people should have been doing, involving entertainment, offices abroad, novelty items or taxis, which were mentioned by my hon. Friend the Member for The Cotswolds. That profligacy is another Labour legacy that I am pleased to see the new coalition Government will take on.
"neither adequate nor well advertised."
"there was nothing for a small business in our position or if there was, we didn't find out about it."
His business also had problems with the publicly subsidised banks. Higher banking costs were imposed on it, leading to its having to reduce staff to meet the cost of the charges. That is not the way to get a successful business developing and going forward. In addition to the problems in getting Government support and dealing with an over-complicated tax system, that managing director experienced a great deal more red tape and regulation, which in turn increased costs. That was a legacy of the last Labour Government: more regulation, more red tape and more costs.
I also received representations from a car manufacturing firm in my constituency. Its managing director thought the previous Government did a good job with its advertising. However, when it came to applying for assistance, his company found that support was not available. That is a terrible legacy. He said the investment company appointed to manage the capital for enterprise fund for the Government was interested only in venture capital parameters such as high rates of return. The company also alleged that it did not receive support from its bank. In fact, it suffered increased charges from very early in 2009.
Both those businesses will benefit from the measures announced in the Budget. The reduction in corporation tax will mean they have more money of their own to invest in their business, and either to take on new staff or extend the working of current staff. The Budget will bring benefit to small businesses in particular. They will welcome the lowest ever rate of corporation tax, which will fall from 28% to 24% during this Parliament. The tax rate reduction for small companies from 21% to 20% will also be welcomed, and the extension of the enterprise guarantee scheme will provide a real boost for small businesses struggling to get credit.
The Budget therefore contains a lot that is positive, contrary to what was suggested from those on the Opposition Benches, where all was doom and gloom. There is enthusiasm for enterprise to get things moving, which is very important for the future of the country, because we must get the debt down and the public finances under control before we can have economic growth. We must never forget that high levels of debt put an unfair burden on future generations. Our role is to look after the future and make sure that our children and grandchildren are not in hock to debt because we have failed to manage the national finances. This emergency Budget will go a long way to rectifying the situation for the future.
Action to stop Labour's job tax by increasing the threshold for employers' national insurance contributions by £21 a week will also be positive. As a result, the number of employees for whom employers pay no national insurance will rise by 650,000. That is another real, positive move to endeavour to ensure that we get ourselves out of the appalling mess we find ourselves in.
The second issue I want to raise is pensions and pensioners. I am delighted that the earnings link is to be restored after 30 years. We have to admit that sometimes the Conservatives made mistakes in government, and it was a Conservative Government who made the mistake of breaking the link. [Interruption.] It is no good the hon. Member for Derby North (Chris Williamson) laughing and smiling, because the Labour Government had 13 years to do something about that, but they did not do a thing. They sat on their hands and made nice noises, but action speaks louder than words. This coalition Government have already taken more action on pensioners than the previous Labour Government did in 13 years.
Mr Stewart Jackson (Peterborough) (Con): Will my hon. Friend remind the House that when we broke the link in 1980 we had an inherited situation of huge debt-an economic basket case-as a result of a Labour Government spending beyond their means. Does he think that that sounds familiar?
Mr Evennett: Exactly. My hon. Friend makes a good point. It is history repeating, is it not? I am sure that pensioners in my constituency and across the country will be pleased by the triple lock, whereby the basic state pension will rise by whichever is the higher out of earnings, prices measured by consumer price inflation or 2.5%. That is good news. One would not believe on listening to the Opposition that there was any good news at all in the Budget, but there is. We will never have pensioners getting a meagre increase of 75p on the basic pension, as happened one year under Labour. That was an insult and the pensioners knew it. We will not allow that to be repeated.
Angela Smith: I will be one of the first to admit that the 75p increase was a mistake. Will the hon. Gentleman acknowledge that, under the Budget, the means of raising the money to bring in the link to earnings a year early might be raising the age at which women can claim the state pension?
Mr Evennett: It is nice to hear the hon. Lady admit that the Labour Government did something wrong. I do not think we have had one word like that today, and I have sat through the whole debate. One would think that Labour Members thought that everything they did was wonderful, but in their heart of hearts they know the truth: there were mistakes. We are endeavouring to rectify those mistakes to make sure that those who are vulnerable, such as the elderly, have the dignity in old age that they deserve, and we passionately support and believe in that.
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