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The hon. Gentleman forgets that from 1997 until 2007 and into 2008 we had unbroken growth every month- [ Interruption. ] I do not know about the hon. Gentleman's constituency, but I have a very deprived constituency and, however critical I was of the Labour Government, a lot of people were able to leave behind the memories of the Thatcher 1980s. They got jobs, bought houses and started to take pride in themselves and their families. They started to think that they had a future. That was our Labour Government, but what those on the Government Benches seem to forget is that they are letting some greedy, irresponsible people get away with what they have done to this country and its people. [Hon. Members: "It's your lot!"] This is exactly it: how could anybody on the Government Benches blame a Labour Government for a financial crisis that swept through the western world, bringing misery and poverty?
The fact is that those on the Government Benches are letting the bankers get away with it-it is obvious even in the Budget that they are doing that. Government Members are going to vote tonight for £5.9 billion of cuts in welfare benefits in the Budget, yet they are taking only £2 billion from the bankers. In fact, they are not even taking £2 billion from them; what they are doing is not hitting the bankers-the greedy, irresponsible ones; the ones who are pocketing the money and taking their bonuses-but hitting the banks and the customers.
Those on the Liberal Benches-the real Liberal Benches -seem to be listening to the Government propaganda. I wonder whether they read David Smith in The Sunday Times the week before the Budget. David Smith-not a well-known Labour supporter-drew our attention to the independent Office for Budget Responsibility, which was set up by the Chancellor. The OBR produced a report, which I see one member of the Front-Bench team has read and understands, containing its forecasting from June, based on the Labour Budget of March. We are talking about the choice for the Liberal Members who entered the Government, having taken their Business Secretary's word that Mervyn at the Bank told him that things were so bad that we had only one option-to push through the cuts, which are reminiscent of the '80s-but we do not.
"The 'before' version, the OBR's baseline projection, was contrary to some reporting last week, a rather attractive vision for the economy over the next few years."
"growth averages 2.7% from next year until the end of the parliament,"
"inflation sticks to the Bank of England's 2% target,"
throughout the life of the Parliament. As for unemployment -this is the choice that those on the Government Benches are making-it will go up with the Budget.
Under the Labour Budget, as analysed by the independent Office for Budget Responsibility,
"unemployment falls despite...Labour's planned spending cuts."
"The economy rebalances away from consumer spending and government towards exports and investment. The saving ratio steadies,"
"borrowing falling from 11.1% of GDP in 2009-10 to 3.9% by 2014-15 and the current account deficit, 1.7% of GDP this year, falling to 0.8% in 2014,"
So when those on the Government Benches are walking through the Lobby to force cuts on people-kids who want to go to university; disabled people; people on incapacity benefit- [ Interruption. ] Oh yes, of course, it is all emotional, but these are people. We are taking a gamble with the Budget, and it is an unnecessary gamble. Professor Budd spelled out in his report that it is unnecessary. When those on the Government Benches go through the Lobby to vote for the Budget-this great risk, as the Business Secretary admitted in the House last week-they ought to know what they are doing to ordinary people in their constituencies and our constituencies. The Budget has been described by the hon. Member for Solihull (Lorely Burt) as tough but fair, but the word that she left out was "unnecessary". The Budget this year will mean a difference of £6 billion, but before the Chancellor brought it forward, he had to admit, when the result came in, that we were £11 billion better off. It is an unnecessary Budget and it is a gamble. Ordinary people will pay for it, and that is a disgrace.
David Rutley (Macclesfield) (Con): Thank you for giving me the opportunity to speak in this debate, Mr Deputy Speaker. We have heard some wonderful maiden speeches today, including those of the hon. Member for Glasgow Central (Anas Sarwar) and my hon. Friends the Members for Truro and Falmouth (Sarah Newton), for Pudsey (Stuart Andrew) and for Thurrock (Jackie Doyle-Price), among other great constituencies of this country. I congratulate them. Our talk about the Budget today has been vital, because it will define the challenge of this Parliament and, quite possibly, of a political generation.
I should like to thank hon. Members on this side of the House for electing me a member of the Treasury Committee. It will be a great honour to serve on the Committee, which plays an important role in Parliament, and I look forward to working with its Chairman, my hon. Friend the Member for Chichester (Mr Tyrie), and all its other members, in carrying out my duties.
Before I go into the content of the Budget, it is important to remind the House why such a Budget is required. Yes, there has been a global economic crisis, but the sheer scale of the budget deficit has clearly been exacerbated by the policies of the previous Government, and it is time that Labour Members had the honesty to acknowledge that. As a special adviser in the Treasury during the last Conservative Government, when "canny
Ken" was Chancellor, the most important lesson that I learned was that you cannot spend what you have not got. Based on the exchanges in the last couple of debates, however, it is clear that that lesson has been lost on Labour Members. It is as though they think that spending is an end in itself, that it is good to spend, and that we should carry on spending regardless. Well, we have had to take the measures to stop all that.
The economic crisis is affecting the whole of the country, including Cheshire, despite what the Leader of the Opposition said last week. In Macclesfield, we shall see the loss of 600 jobs with the closure of BAE Systems' Woodford site in 2012. There are also closures at Kay Metzeler in Bollington, and at Swain and Sons in Poynton. Most recently, we have heard the announcement of the loss of 250 jobs when the Cheshire building society closes down its operations in our town. We have now seen a staggering 177 % increase in unemployment in the past five years. We are working hard locally to address the situation, and we will be holding a business forum to determine what further action can be taken.
It is clear, however, that an improvement in the economy locally, as well as in constituencies across the country, will require national action as well. That is why I welcome the Budget, with its measures to show that Britain is open for business. That will be important for local employers in Macclesfield, such as AstraZeneca, who need to have the confidence to go on investing in this country, and for those looking to start new businesses in regions such as the north-west, where job creation needs a big boost from business, not from the public sector. I am also pleased that the Chancellor is taking positive steps to reduce the budget deficit. It is the biggest in living memory, which is why we are having to take tough action to get the economy moving again.
Given such difficult circumstances, the focus of our debate should be not only on what needs to be done, but on how these huge objectives can be achieved. Policies and programmes will need to be reviewed as planned, but let us not forget the process by which the challenges should be addressed. My hon. Friend the Member for Gainsborough (Mr Leigh) has already made some important points on this. The public spending review will be a critical task. Lord Waldegrave of North Hill, my former boss at the Treasury, recently gave the Chief Secretary to the Treasury some advice. He told him that he would need to have the hide of a rhinoceros in taking the review forward, and I have no doubt that that is true. I wish the Chief Secretary every success in establishing a rigorous and challenging review, and in deciding the urgent priorities in Government spending.
Delivering the Budget will also require a transformation in the culture of our civil service. We need to help civil servants to feel proud about their efforts to save taxpayers' money. When I worked at Asda, colleagues there were genuinely motivated and proud to work towards delivering a lower cost of living to customers. They knew that to deliver everyday low prices they had to focus on delivering everyday low costs, and they were proud to do that. It was part of every bit of work that they did, day in, day out. I suggest that there are lessons to be learnt from that approach in the delivery of value for money in Government and effective public services. It is clear from the actions of Ministers in the coalition Government that they are committed to bringing about cultural change of that kind, and I fully support their efforts.
It is good to know that clear objectives are being set at the top, and that value-for-money Ministers will be appointed in every single Department; but I trust that, in such difficult circumstances, those objectives will be shared throughout Whitehall, and that the Cabinet Secretary will give more priority to the value-for-money objectives of permanent secretaries and their teams. I believe that much of the knowledge required for the achievement of those objectives rests with those responsible for front-line service provision, where the proximity of customers provides powerful knowledge and understanding.
During the general election campaign, I met thousands of public sector workers who were appalled at the amount of waste and the layers of bureaucracy that they had to face every day of the week. One hospital chef told me that he had three bosses. I think most people would agree that that should not be part of the recipe for providing nourishing meals for patients in hospitals. That is why I support Ministers in their efforts to learn from people in the front line and, despite many competing priorities, find time to listen to their views and work with them. I urge those Ministers to continue their efforts to break down the barriers that are preventing taxpayers from receiving the effective services and real value for money that they so richly deserve.
For those reasons, I support the Budget. It is tough and it will be challenging to deliver, but it is the medicine that is needed to treat the trauma of this economic crisis and return our ailing economy to full health. I entirely support the Chancellor's proposals, which are set out so clearly in his Budget.
Mr Ivan Lewis (Bury South) (Lab): I congratulate the hon. Members for East Surrey (Mr Gyimah) and for Maidstone and The Weald (Mrs Grant), my hon. Friend the Member for Airdrie and Shotts (Pamela Nash), the hon. Members for Thurrock (Jackie Doyle-Price), for Pudsey (Stuart Andrew) and for Truro and Falmouth (Sarah Newton), and my hon. Friend the Member for Glasgow Central (Anas Sarwar) on their excellent maiden speeches.
This is a Budget that will define not only the new Government but the kind of country that Britain is to become for a decade, perhaps even a generation. The choices made in this Budget will have an impact on every middle and low-income family, every community and every workplace. They will determine not only our economic destiny, but the very nature of our society. Those choices, presented as economic imperatives, are in reality driven by an ideology which yet again fails to understand that if a state retreats too far, the result is not a big society but a broken society.
I want to concentrate on public services and welfare. Let us be clear: this is a Budget of choice, rather than a Budget in which there is only one choice. The deficit could have been reduced over a longer period, as happened in the aftermath of the IMF loan in the 1970s and that of Black Wednesday in the 1990s. The balance between taxation, spending cuts and growth could have been different, and the overall package of measures could have been progressive rather than regressive.
Much has rightly been made of Liberal Democrat duplicity. I watched closely on Budget day as the Deputy Prime Minister anxiously passed the Red Book to the right hon. Member for Gordon (Malcolm Bruce), frantically seeking to draw his attention to the tables on pages 66 and 67. The right hon. Gentleman dutifully made a trenchant speech, claiming that this was a progressive Budget and citing the tables as evidence. Within 24 hours, the Institute for Fiscal Studies had made it clear that such claims were as misleading as a typical Liberal Democrat "Focus" leaflet. It confirmed that the overall impact of the Budget measures was regressive and that the poorest would be 2.6% worse off, while the richest would be worse off by only 0.6%. That did not include cuts in benefits and public services, which would widen the gap considerably. I do not see how Liberal Democrats can claim to be progressive when they are willing to vote for this Budget, let alone for VAT increases.
In legitimacy and credibility terms, the Tories have matched the Liberal Democrats in their contempt for the electorate. It seems to have been forgotten that the Prime Minister, the right hon. Member for Witney (Mr Cameron), claimed to have modernised his party. It was no longer the nasty party, no longer indifferent to social and economic inequality. The right hon. Gentleman would govern from the centre ground, and would face down the right-wing ideologues in his party.
This Budget proves that that was all a charade. Instead we have the same old Tories, driven by a "leave it to the market" dogma, cavalier about social disintegration and contemptuous of the public sector. As throughout history, they seek to divide and rule, reversing new Labour's economic prosperity and social justice paradigm and disregarding the link between public sector investment and private sector growth. They stigmatise the public sector and its work force as the primary cause of our economic problems, while irresponsible bankers and markets without ethics hardly get a mention. This narrative emanates from politicians and commentators who mainly use private education and health care, whose personal wealth guarantees their quality of life, and who are out of touch with the daily realities of most people in this country.
Let us consider the public servants who make a difference on a typical day in my constituency and those of every other Member: children's centre staff and nursery nurses; teachers, classroom assistants and support staff; head teachers; police officers and police community support officers; prison and probation officers; doctors, nurses and ancillary staff; district nurses, home carers and mobile wardens; social workers, youth workers and Connexions staff; area co-ordinators and leisure staff. I could go on and on. Yes, and managers and administrators too; after all, effective organisations in the public as well as the private sector need good management and sound administration. There are also the construction companies, contractors and suppliers, providing a range of goods and services to public agencies. The public sector civilises our society, helps people to fulfil their potential, and protects those who are sick and vulnerable.
I do not deny the need for reform and cuts. In government, we should have devolved more to local government and local communities. The remuneration of public service executives should be transparent, and some roles can no longer be justified when tested against other priorities. However, cutting 25% to 30% of the
public sector in only five years will both destroy our social fabric and slow the pace of economic growth. This coalition believes that as the state retreats, enterprise will flourish and the "big society" will fill the gap left by public services. That is fantasy politics and fantasy economics. The private sector will struggle to expand while the economy is fragile, which is why these cuts are too fast and too deep. Also, 1.2 million private sector jobs are dependent on the public sector, and 40% of public expenditure is spent in the private sector. The agents of the so-called big society-voluntary groups and community networks-will have their grants cut by local councils reduced to fulfilling only statutory duties.
The Secretary of State claims to champion the family, but he now wants people to break up their families and give up their homes in the pursuit of work. I thought his party was committed to a balanced, not a "get on your bike", economy. He was at pains to say, however, that people would not have to go up north; heaven forbid!
Our opponents can attempt to rewrite history but they cannot change history. We are proud of the decisions we took to save Northern Rock, recapitalise the banks and boost the economy with a significant fiscal stimulus. We protected savers and home owners and intervened to save jobs and businesses. Our approach, in conjunction with that of our global partners, ensured recession did not lead to depression. Prior to the credit crunch, we delivered an unprecedented 11 years of economic growth, with people on low and middle incomes seeing major advances in their standard of living. We lifted hundreds of thousands of children and pensioners out of poverty, and public services were fixed and then transformed.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): We have had some excellent debates in the Chamber since the Chancellor presented his Budget to the House. They have been good debates not least because we have heard the speeches of some extraordinary new Members, and I hope I will be forgiven for dwelling for now on only the maiden speeches we have heard today.
The hon. Member for East Surrey (Mr Gyimah) rightly perceived that Budgets are not simply collections of statistics. They are important because they are statements about our ambitions for our country and our communities. I was glad to see the scale of his ambitions for East Surrey and I wish him the very best of luck in the difficult business of delivering them, but he showed us that he needs no shoulders to stand on.
The hon. Member for Maidstone and The Weald (Mrs Grant) put the emphasis on family and enterprise. She will find a ready audience for both subjects in the House. She spoke with real feeling about the need to draw politicians and civil servants into public life from a wider range of backgrounds. She is right about that.
My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) spoke movingly about her memories of John Smith and of her debt to John Reid. I served as one of his Ministers and she got his character absolutely
right. She was passionate about her constituents and will clearly be an effective fighter in this place on their behalf.
The hon. Member for Thurrock (Jackie Doyle-Price) spoke about her roots and how they have shaped her political outlook. She left us very much wanting to hear more. The hon. Member for Pudsey (Stuart Andrew) told us about some of Pudsey's famous sons-if that is the word to describe both Sooty and Sweep; I have never been quite sure-and I now know the home of Britain's best fish and chips. The hon. Member for Truro and Falmouth (Sarah Newton) was passionate and informed about green energy. The House is in need of those qualities on that subject, and we look forward to hearing more from her.
Listening to my hon. Friend the Member for Glasgow Central (Anas Sarwar) brought me enormous pleasure. He captured with brilliance his father's passion and contribution to this place. He showed us that he is a magnificent successor to his father.
When all is said, however, at the heart of the debate is a judgment. The reality is that the Budget has presented us with the judgment of a gambler. That is not just our conclusion; we have heard it across the spectrum of informed opinion. KPMG said:
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