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"the disorders cannot be fully understood unless they are seen in the context of complex political, social and economic factors".
"There can be no doubt that"
"was a major factor in the complex pattern of conditions which lies at the root of the disorders in Brixton and elsewhere. In a materialistic society, the relative deprivation it entails is keenly felt, and idleness gives time for resentment and envy to grow."
With regard to the Tulse Hill estate-I have just come from that estate to the House today-it was pointed out that high unemployment, coupled with society's emphasis on material acquisition, led to both material deprivation and a sense of hopelessness, particularly among the youth. Of course we know what happened after that: unemployment rocketed beyond the 3 million barrier and stayed there until 1987.
Mr Tom Harris: I rise in part to respond to the hon. Member for Spelthorne (Kwasi Kwarteng), because it was not my hon. Friend the Member for Streatham (Mr Umunna) who suggested that riots would return to the streets of Britain; it was the Deputy Prime Minister, who said just a few weeks before the general election that the scale of cuts foreseen at the time would result in civic society breaking down in this country. Is the hon. Gentleman suggesting that the Deputy Prime Minister is mistaken?
There has been a lot of talk about IFS and Institute of Directors reports, various statistics, the extent to which we need to reduce the structural deficit and the extent to which it is cyclical-but we are talking about people's lives, and I am deeply worried about what the approach adopted by the Government means for my constituents and those who live in similar areas. There was talk of contrived anger. My worry is not contrived; it is very real. As has been said, the Office for Budget Responsibility has revised up the unemployment forecast by 100,000 people. The Chartered Institute of Personnel and Development is saying that it is absolutely certain that unemployment will go beyond the 3 million barrier again.
I took the trouble to look into some of the cuts that Geoffrey Howe imposed on the country, and what worries me most is that they pale into insignificance compared with the cuts envisaged by the Government now. Howe cut spending by 4% between 1981 and 1984. The Chancellor is planning 25% cuts over four years.
I thank the hon. Gentleman for giving way in his an extremely thoughtful speech. Does he not agree that we have to deal with these huge
problems because of the structural deficit that we had going into the recession? Does he agree with this quotation:
"Public finances must be sustainable over the long term...If they are not, the poor, the elderly, and those on fixed incomes who depend most on public services will suffer most."?-[ Official Report, 2 July 1997; Vol. 315, c. 303.]
Mr Umunna: First, the deficit pre-November 2008 was primarily in some respects caused by increased spending to which those who are now in the Conservative Government were then committed. Conservative Members are continuing to promote the view that somehow there was no global credit crunch, and that the bankers, many of whom they are very friendly with, had nothing to do with it-but the general public do not buy that.
Conservative Members will have to accept that, but the real question that I want answered-I note that a Minister is still here-is: what comfort can he give to the people who live in places such as the Tulse Hill estate in my constituency that they will not have to pay the price? What measures will he take to help them to get back into work? What will he do to give them extra training and experience? Why on earth is he cutting programmes such as the future jobs fund, which I have seen working in my constituency, helping to get people back into work? The Government say that the future jobs fund is ineffective and a waste of money, but they do not have figures on which to base that assertion. The Red Book makes no provision for funding any programme to get young people back into work or into training that will replace what the Government are abolishing.
The Financial Secretary to the Treasury (Mr Mark Hoban): Perhaps the hon. Gentleman will think back to the package of cuts that was announced last month. Some £500 million of the £6.2 billion of cuts was recycled into extra training and more apprenticeships; that is where this party's commitment to growth comes from.
Mr Umunna: I am not going to say that I do not welcome things such as apprenticeships, because we need those programmes, but at the same time as the Government are putting in place 10,000 apprenticeships, they are slashing a programme that could place hundreds of thousands of people in work. I do not understand their approach; ultimately, my constituents want to know what is happening.
Before I talk about the Budget, I wish to say something about the maiden speeches that we have heard. We heard an excellent maiden speech from my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). Her seat is similar to my Northumberland constituency, and she spoke eloquently about the contribution that can be made by tourism and farming, which I look forward to championing with her. My hon. Friend the Member for Hendon (Mr Offord) also spoke well, and the hon. Member for Kingston upon Hull East (Karl Turner) was a great deal more articulate than his predecessor in
the House. My hon. Friend the Member for Camborne and Redruth (George Eustice) said that his family lived in his constituency 400 years ago. The constituency was also the home of Ross Poldark, who found fame and fortune in the novels, and I am sure that my hon. Friend will have a similarly colourful career.
It gives me no pleasure-to a certain degree I endorse what was said by the hon. Member for Streatham (Mr Umunna) on that subject-to speak in a Budget debate when we all face such difficult circumstances. Unemployment has increased considerably in the four Northumberland constituencies. It has increased by nearly 60% over the past five years in the two Labour-held constituencies of Blyth Valley and Wansbeck, and by a similar amount in Berwick-upon-Tweed. Unemployment in Hexham has increased by 67% in the past five years.
I have heard much of what Labour Members have said in today's debate, but this is not a question of ideology. We are not Thatcher's children producing Thatcherite views. I assure Labour Members that I did not join the Conservative party until considerably after Mrs Thatcher left office, and I am not in a position in which I want to put forward such a point of view. The ideology behind what we are trying to do to put things right is a simple question of maths. We have outgoings of £700 billion and incomings of £545 billion. Those figures are unquestionable; the issue is how we address the situation.
My ideology arises from the fact that my family came to this country nearly 100 years ago as immigrants with next to nothing. They had no opportunities, save what they could make. In the 1920s-when there was a real recession and things were really bad-my grandfather came home from school to be told by his father that school was no longer an option, and he would have to be withdrawn so that he could work for his father. The three children then began to work for their father in the basement of a small flat in Islington and built up a small manufacturing business on the back of a small gift of £40. I wish to say something about manufacturing. In 1997 we made roughly as much as we consumed in this country-about £160 billion, compared with £150 billion. Now, however, we consume nearly twice what we make.
In Northumberland apprenticeships are struggling. I visited Glendinning's, a firm in my constituency, shortly before the election. I was told that the firm could not take up the Government's apprenticeships, for the simple reason that they were so complex and so administratively difficult to implement that it was better off working outside the Government's scheme and ignoring any Government money.
During the election I went round nearly all the stores in Wylam in my constituency and asked the owners what the effect would be if national insurance went up. Every single one said that if it was increased, they would have to put people out of work.
There are many responses to the Budget that we could discuss, but there has been little from the Labour leadership. I have listened to the debates so far, and yesterday I listened to the hon. Member for Harrow West (Mr Thomas), who uttered not one word about what he would do differently. It is all very well saying that the Labour Government were going to cut the deficit by 50% in a number of years-but surely the question is what would they cut, and what would they
do differently? The answer to that is fundamentally lacking from the Opposition's arguments. It is a bit like watching the French football team: everything is wrong, but they have no alternatives.
I have also read in detail the speeches of the shadow Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), and the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who spoke on Tuesday. The only features of which she spoke in support were the capital gains tax measure, the 50p tax and the bank levy.
Earlier today, to support his argument, the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) quoted the right hon. John Smith saying, "I judge a Budget on what happens to a person living on a council estate." We have a number of council estates in my constituency, and during the election we constantly articulated the view that to spend £400 a week while making only £300 a week is to head for financial disaster. Everyone can understand that.
We have heard a lot in our debates in the House about various organisations' comments on the Budget. I represent a north-east constituency. The North East Chamber of Commerce, an august body which represents more than 4,000 businesses and more than 30% of the region's work force, says:
"The Budget clearly contained a number of painful measures on...taxation and spending. However... Funding for a strategic economic development body in the North East was maintained".
"Reductions in employer National Insurance (NI) contributions and headline Corporation Tax are welcomed by businesses, as is the extra exemption on NI in certain regions".
"The Chancellor was right to avoid further capital spending cuts and to confirm spending on the Tyne and Wear Metro".
"The scale of the public finance deficit clearly required radical action... NECC believes the measures taken broadly support the wealth-creating part of the economy in the North East."
"Freezing public sector pay and reforms to pensions were difficult but necessary decisions to address the deficit and help reduce the need for large job cuts in the region's public sector."
The NECC welcomes- [ Interruption. ] Bless you. I welcome the hon. Member for Washington and Sunderland West (Mrs Hodgson), a fellow north-east Member, who is suffering from hay fever. I am happy to have accepted her intervention, brief though it was.
The NECC has also welcomed the increased thresholds for employer national insurance contributions and changes to the headline rate of corporation tax. The one criticism I put to Treasury Ministers is that, like the NECC, I find it
"disappointing to see no change to empty property rates, which we continue to see having a punitive effect"
On capital spending, it is wonderful to see that the Tyne and Wear metro will go ahead, and that the A1 will finally see some form of action, which has long been supported by many hon. Members-albeit that the money still has to be found.
As I was sitting here this morning representing a fundamentally farming constituency during questions to the Department for Environment, Food and Rural Affairs, there was a brief sighting of an interesting and rarely seen-in the House for the past six weeks-individual, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). He is not normally seen at DEFRA questions, and like a small badger he nipped in and, alert to a possible cull, nipped out again very quickly, before any of us could question him in any way whatever, whether on DEFRA questions-not something that I necessarily think he would have been seeking to answer-or on Budget matters. It would have been wonderful to have had the opportunity to ask the former Prime Minister just what he had to say about the state of the budget. I would certainly have wanted to make the point that we are set to miss his golden rule by £485 billion-quite a significant miss, one might think. One thing is for sure: when he is brought to account in this House, he will have to answer for the state of the nation and the country's finances. He may run, but he will never hide from that issue. He has much to account for, and we will ensure that he does so.
I finish by recommending a study of all the finances. Some aspects might be due to other factors, but most of what we now see happened on the watch of the previous Government. I recommend the Budget to the House.
Valerie Vaz (Walsall South) (Lab): It is a pleasure to follow the hon. Member for Hexham (Guy Opperman). He does his family proud. They will be very proud of him and the speech that he made today. It is also a pleasure to listen to all those who made their maiden speeches. They will do their constituents proud.
Thank you, Mr. Deputy Speaker, for allowing me to speak in the Budget debate. There was an audible gasp around the country, and that was just from the parents whose children had finished their GCSEs, and that includes my own daughter Liberty, my nephew Luke and 630,000 other 15 and 16-year-olds. They have worked hard and given up many activities, so that when August comes no one can say that they did not work hard and that exams are getting easier. When they end up here, as some of them will do, I hope that they will not condemn us by saying that we just taught them how not to pass exams and did not give them a decent education. We should acknowledge the efforts of their teachers, too. My husband Paul is waiting for an Ofsted inspection, so there is another major event in the family. I was pleased to invite his school, St Mary's Roman Catholic primary, to the House. They came on Monday, and were greeted by their MP, the hon. Member for Brentford and Isleworth (Mary Macleod).
The Secretary of State for Education could learn something from those young people. He seems to misunderstand the word "free". He wants people to set up free schools, but they are not free; the money is coming from the public sector and coming from taxpayers so that some people can say, "We're setting up vanity schooling;" and that is just what it is.
Much has been said about public sector workers, and it is here that I have to declare an interest because I have friends and former colleagues who work in the public
sector. I know how hard they work. They work beyond their contractual hours, and when there is a recruitment freeze, they pick up the slack and carry out the work created by the vacancies. They went into the public sector because they wanted to serve the public, and their only perk was a decent pension. They have never had a large wage compared with those in the private sector. They are the people who serve the House, who turn policy into legislation and who defend the Government. Instead of being accountable to members of the public, they seem to be accountable to accountants. They know where the budget can be trimmed. Every single minute of their working day is accounted for.
Public sector workers work beyond the call of duty just to ensure that the wheels of this country turn. They always act in the public interest and are committed and loyal to this country. I note that the Government want to hear from them about how to make cuts, but that old cliché of turkeys voting for Christmas comes to mind, because no one will say, "Here, have my job. Take this as a cut." The Government should carry out a skills and policy audit of each Department, because that way they can decide their policies and priorities. I note from the Chancellor of the Exchequer's speech that he has asked Will Hutton to look at plans for fairer pay throughout the public sector, and I ask the right hon. Gentleman to extend that remit to those private companies that received public money in the bail-out.
Will Hutton said himself in an article in The Observer that even John Lewis, the founder of the department store, thought it extraordinary that a chief executive should receive almost 20 times' the pay of other workers. President Obama's pay tsar is doing exactly the same in the United States, and Will Hutton's remit should be used to renegotiate the payouts and compensation made to those who have received exceptional taxpayer assistance.
Much has been said about the private sector mopping up after the public sector, but the reality is there to be seen in my constituency. On Saturday I met a delegation of workers from Maple Leaf Bakery in Raleigh street. They told me how they are under pressure to sign a new contract at different hourly rates. If they do not, and even if they put in a letter of protest, they will be sacked, so they either accept the new rate or go. The rate has been reduced from £8.48 an hour to £6.88. Those people make our daily bread. I met them, and some have been at the factory for more than 37 years, so they have the skills. If there had not been a minimum wage, who knows what their pay would be? ACAS has been involved, and all that the workers want to do is work. They have a way forward and have suggested a team to look at ways of reducing waste, upgrading the plant and cutting the number of managers. Its parent company in Canada is making a loss, but the company in my constituency makes a profit. My hon. Friend the Member for Bolsover (Mr Skinner), commonly known as the beast of Bolsover, is sadly not in the Chamber, but he described the events of the economic meltdown as an "economic tsunami". I could not put it any other way.
People forget that when the Prime Minister attends the G20 summit at the weekend, he takes with him the legacy of my right hon. Friends the Members for Kirkcaldy and Cowdenbeath (Mr Brown) and for Edinburgh South West (Mr Darling), who did not blink in the face of the
huge financial pressures and meltdown but steered the ship of state into safer waters. That is the true legacy of the past 13 years.
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