5.14 pm
Angela Smith (Penistone and Stocksbridge) (Lab): All I can say about the contribution from the hon. Member for Solihull (Lorely Burt) is that it is a bit rich to hear her talk about the stance and policies of the Opposition when she represents a party that, over the years, has perfected and polished the art of opposition based on opportunism.
Some Budgets are remembered for decades to come. Some are instantly forgotten, and some are seen as a missed opportunity. I suppose that only time will tell how this Budget will be remembered. However, my best guess is that it will be seen as a missed opportunity to turn on to a different road that would lead to jobs, growth and long-term sustainable investment in our future.
Yesterday, we needed to see a change of direction, but what we got was more of the same from the Tories. Unemployment is now at its highest level for 17 years, and even more worrying is the latest youth unemployment figure, which now stands at 1 million. That is not only a tragedy for the individuals involved but a national catastrophe. The promise to help 100,000 youngsters is welcome, but it goes nowhere near far enough. It also raises the question of why the Chancellor abolished the future jobs fund last summer, condemning many of our young people to a bleak future. The real fear is that this Government are creating another lost generation, to go with the one that they created in the 1980s. That is my generation, and it has never recovered from the years of Thatcherism. If that happens, the Government will deserve all the scorn that will be directed at them.
Yesterday, we needed to hear how the Government were going to help to get people back to work, but, unfortunately, we heard very little of that. What is being offered pales into insignificance when compared with what the Chancellor has already done to damage our prospects for growth. The fact is that £80 billion is being taken out of the economy over the next four years as a result of the comprehensive spending review. That is twice the amount that we believe to be sustainable.
The 1.2% growth in the economy experienced in the spring of last year vanished in the cold of winter, to the extent that the economy contracted by 0.6% in the last quarter. With the first quarter figures for this year not expected to be much better, there is a real possibility of the country slipping back into the danger zone. Consumer confidence is at its lowest level ever, unemployment is on the up, living costs are squeezing people’s incomes hard, and the full ferocity of the spending cuts will start to bite in April, which is just a few days away.
All these factors have led the independent Office for Budget Responsibility to revise downwards its growth forecast for 2011, from 2.3% when this Government took power, to 2.1% after the emergency Budget, and now to 1.7%. Many people expect even that figure to prove optimistic, with the possibility of growth being even lower over the next couple of years. Even if the
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OBR is right, the lower growth figures will have dire consequences for people’s jobs and living standards. It is already being said that lower growth figures will add £10 billion a year to Government spending, because of increases in unemployment and welfare benefit costs. To me, that is the economics of the madhouse.
It does not have to be like this. In countries such as America, growth estimates are being revised upwards, not downwards. However, according to Mervyn King himself, we are now seeing the longest fall in disposable income since the 1920s as a result of this Chancellor’s policies, and the Institute for Fiscal Studies is saying that households will be 6% worse off than they would have expected to be for the period from 2008 to 2011.
There is more to come, with cuts in housing benefit and tax credits in April. Tax credits played an important role in cushioning people during the recession. They provided a cushion for many people who were put on short working hours and had their incomes cut following the financial crisis. I saw men at Corus being put on short time to save the company, and Corus was able to do that successfully, with the co-operation of the union, because tax credits helped to keep those men’s incomes at a high enough level to prevent them from hitting the poverty line.
On top of those cuts, many people are being badly affected by inflation, which is now running at 5.5% on the retail prices index, which is more indicative of the situation. That is much higher than the Chancellor’s initial forecast. We know that one of the reasons for that is the rise in VAT to 20% in January. When they were in opposition, the Conservatives and the Liberal Democrats promised that they would not raise VAT. It is no wonder that consumer confidence has fallen to record low levels over the last few months, yet this Budget does not offer any help for hard-pressed people who are struggling to cope.
While the increase in personal allowances is to be welcomed, it in no way fully compensates for the previous increases in VAT and other tax rises being implemented. In a sleight of hand, the Chancellor has moved the uprating of tax allowances, as we now know, from the retail prices index to the consumer prices index, which will cost every taxpayer dearly and bring in an extra £l billion to the Treasury by the end of the Parliament—more than covering the increase in personal allowances.
Even the Institute of Directors, not generally given to rigorous criticism of the Conservatives, commented recently that average earnings were falling and that household disposable income faced a big squeeze. It concluded that this was, at best,
“the jobless and joyless recovery”—
not exactly a ringing endorsement of the Chancellor’s policies.
This Budget gave the Government the chance to alter course, to reflect on a vastly changing global situation, to calmly look at the evidence and to realise that the country is not recovering. They talk about rebalancing the economy, and they could have changed their minds and invested in Sheffield Forgemasters rather than leave it hanging in the wind, but that is what they did.
What we have had instead from this Budget is the same old Tories making the same old mistakes and it is the ordinary people who will suffer with their jobs. We have a politically motivated Chancellor who is making
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cuts now to offer tax cuts at the next election. This is a Chancellor who puts his party and his politics first and the economic situation and prospects for the country last. The Chancellor said this Budget was all about growth, but independent growth forecasts have downgraded the prospects for it. In my opinion, this Budget is a missed opportunity to invest in the UK, to rebalance the economy and to help hard-pressed families all around the country to make ends meet. There is no doubt that the Chancellor’s policies are hurting, but in the end, just as under Thatcher, we will not see them working.
5.22 pm
Damian Collins (Folkestone and Hythe) (Con): To listen to some of the speeches of Labour Members one would think that the debate about the prosperity of hard-working families and individuals is somehow totally separate from the debate about reducing the deficit and getting our country’s finances back into balance. The two, of course, are intrinsically linked. We cannot have long-lasting peace and prosperity for our people unless we live within our means. The Government are no different from any business, any family or any household in that regard.
In his opening remarks, the shadow Chancellor wanted to take us back to the period in the run-up to the last Budget. The forecasts coming from the City of London about British Government debt and the state of our economy spoke of a dire situation. I am not talking about only forecasting companies and organisations, some of which were criticised earlier, but organisations that have skin in the game, so to speak, whose job is to advise investors.
The managing director of one such company, PIMCO, which is one of the world’s largest fund management companies and also the employer of the shadow Chancellor’s brother, said in the run-up to the last Budget that British Government debt was
“resting on a bed of nitroglycerine”.
He published a chart of a “ring of fire” in which Britain appeared alongside other countries such as Ireland, Portugal and Mexico that have terrible problems with their debts. That situation, however, has been transformed by this Government’s policies. Everyone in this country should be glad about that; we will reap the rewards from that change in the future.
Household debt has been mentioned. Anyone looking at the Red Book can see that levels of household debt rose continuously during the 13 years of the last Government. That problem was driven by unsustainable levels of credit, with which this Government have had to deal, as it was an underlying problem in our economy.
Income tax has also been touched on. Like all Government Members, I welcome steps to take the poorest people and families out of income tax altogether. More than 1 million people have been taken out of it. We all know that one of the greatest stealth taxes pushed by the last Government was the failure to keep the income tax thresholds moving in line with inflation, so millions of people were paying taxes at higher rates and levels than they otherwise might have done. This Government have done something to address that.
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I want to say a little about the plan for growth. Like many other Members, I take a keen interest in the enterprise zones proposed in the Budget. My part of east Kent contains pockets of considerable deprivation in national terms as well as in comparison with the rest of the south-east of England. Along with colleagues, I will use my local enterprise partnership to lobby for the creation of an enterprise zone in our area.
One of the aspects of enterprise zones that interests me most is that areas will keep the uplift in business rates generated by the zones to reinvest in their communities. A White Paper on local growth published last year by the Department for Business, Innovation and Skills proposed giving councils more powers and more incentives to generate greater business activity in their areas, and to keep that business rate uplift to reinvest in their communities. Local authorities throughout the country, whether or not they end up being part of enterprise zones, may be able to develop their own business plans for local growth. There is the potential for mini and micro enterprise zones in every area, or even on every high street, in the country.
I also welcome the announcement of incentives for local authorities and planning bodies to promote growth and increased business activity in their areas. During Question Time this morning, I asked the Secretary of State for Energy and Climate Change whether that announcement would apply to the national policy statement on energy, on which the Department is currently consulting. Nuclear power stations are deemed to be part of the national infrastructure rather than a matter for local authorities, but they can provide considerable economic benefits, and I have been campaigning for a new nuclear power station at Dungeness in my constituency. There is considerable economic deprivation in that part of Kent, which is part of an economic zone that also includes Pfizer’s Sandwich plant. The establishment of a new power station at Dungeness would boost the local economy and create thousands of high-skilled jobs, and if it can be achieved through the measures in the Budget, it will be greatly welcomed by my constituents.
The Budget also contains measures to boost the creative economy. The Select Committee on Culture, Media and Sport, of which I am a member, has been considering the funding of the arts and heritage, and our report will be published next week. It was completed before the Budget statement. I am particularly encouraged by the measures to incentivise private giving through legacies and gift aid, which will benefit charities to the tune of hundreds of millions of pounds. I believe all Members will welcome that. The Budget also provides for breaks for smaller businesses in the creative sector. A number of Members have referred to the measures to increase investment in small businesses. Many creative and high-tech businesses, such as those involved in the digital economy, are small and entrepreneurial. My hon. Friend the Member for East Surrey (Mr Gyimah) spoke eloquently about the benefits that the Budget provides for such businesses.
I also note from their paper “The Plan for Growth” that the Government intend to relax the restrictions on the performance of live music, especially in smaller venues. There has been considerable debate in the music industry about the restrictions introduced by the last Government in the Licensing Act 2003, which made it harder for people to organise live events by imposing
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more regulation and costs. The Government will introduce measures to make the position easier not just for live musical performances but for theatre and cinema, and I think we can all welcome those as well.
This was a Budget for growth, featuring a series of bold plans not only to make some of the poorest people in the country wealthier by reducing their income taxes, but to increase investment in smaller companies and the micro-economy to benefit people and businesses throughout the country and particularly in my constituency.
5.28 pm
Mr Chuka Umunna (Streatham) (Lab): Before I make my substantive point, let me make two observations, on growth and employment and on business confidence.
I do not think there is any disagreement between the two sides of the House on the need to reduce our debts. The controversial issue is the time frame within which we should do that. If we want to reduce the deficit, we will obviously need to produce growth and jobs, because people who are out of work do not pay income tax and we have to pay benefit. I believe that the cost of every 100,000 people out of work is about £500 million in benefit payments. According to the latest figures, 4,000 people in my constituency are claiming jobseeker’s allowance. I hope that we can get them back to work very soon.
The Office for Budget Responsibility’s downgrading of the growth forecast has been widely reported, but its revision of its autumn estimate of the number of jobseeker’s allowance claimants has not been commented on. The OBR revised upwards its forecast of the number of JSA claimants in this year and the following four years. For this year, unemployment has been revised upwards, and the number of people claiming JSA has been revised up by 50,000 compared with the autumn forecast. For next year, the forecast has been revised up by 120,000, and for 2013 it has been revised up by 130,000.
Angela Smith: Does my hon. Friend agree that such statistics say nothing about the tragedy that unemployment visits on the lives of individuals, and especially on the lives of our young people and on their prospects for the future?
Mr Umunna: I absolutely agree. As a former employment lawyer, I am well aware of the huge impact that loss of work has on individuals and their families.
We are entitled to ask why the unemployment forecasts have been revised upwards. That has happened because of sluggish growth, and the OBR’s autumn forecast clearly states that the sluggish growth has been caused in no small part by the extreme fiscal consolidation embarked on by the Government. Therefore, there are more people out of work, claiming benefit and not paying income tax due to the policies of this Government. The OBR has said that.
The Chancellor’s strategy on business confidence and investment is clear. As the Government hack off chunks of the public sector—causing, of course, mass public sector job losses—he says that the private sector will automatically step in to fill the gap, and he foresees private sector growth fuelled by a boom in exports and business investment. Business confidence is key, and since this Government took office confidence has fallen.
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The latest Institute of Chartered Accountants in England and Wales and Grant Thornton UK business confidence monitor shows a continuing downward trend in business confidence in this country for the fourth consecutive quarter. I sincerely hope that that confidence returns, because the people in the communities I represent in Streatham and parts of Clapham, Balham, Tulse Hill and Brixton will be among those who suffer.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Does my hon. Friend share the concerns that were raised with me yesterday and today by many green businesses that this Budget could have been an opportunity for growth specifically in the green sector, yet the ability of the green investment bank to lend has been delayed until 2015—if it will be able to lend at all? The Government talked yesterday about the green deal, but there are no details about what incentives to many householders across the country might be.
Mr Umunna: I agree, and my hon. Friend’s comments bring me neatly to the topic of the Business Secretary’s document, “The Plan for Growth.”
Aside from the two observations that I wanted to make, I want in particular to comment on the document’s proposal to scrap the planned extension of the right to request flexible working to parents of 17-year-olds. That has been cited as a way to ease the burdens of employment regulation on business. “The Plan for Growth” says the administrative burden of extending that flexible working will cost about £500,000. That figure is taken from the Government’s own impact assessment of the measure, published in October last year.
Although “The Plan for Growth” mentions the £500,000 figure, it does not tell the whole story. The assessment agrees that there are additional procedural costs to business in extending the right to request flexible working, which it quantifies as £1.3 million, including the administrative costs I have just mentioned. In addition, there is a £975,000 cost in making adjustments to working patterns. However, that is far outweighed by the savings to business, which are listed in the Government’s impact assessment: £1.1 million from higher productivity, £1.2 million from lower labour turnover and £63,000 from reduced absenteeism, totalling £2.4 million in the first year. Overall, the “net present value” of introducing the measure—the benefit to business—would be £41.2 million. Again that is not my figure, but the Government’s. Therefore, on pure cost grounds, I do not understand how that decision makes any sense.
It is a shame that the Minister for Employment Relations, Consumer and Postal Affairs is not here, because he signed off the impact assessment with the following statement:
“I have read the Impact Assessment and I am satisfied that…it represents a fair and reasonable view of the expected costs, benefits and impact of the policy, and…the benefits justify the costs”.
Never mind the costs of the measure, because there are some things in society that we do not price up and put a market value on—one is the time we spend with our family. That is presumably why the Prime Minister said on 22 January 2010 that he intended to head up the
“most family friendly Government we’ve ever had”
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and why, in the lead-up to the general election, the Deputy Prime Minister said:
“We are not casual about the pressure that many parents feel”.
The impact assessment is clear, because under the heading “key non-monetised benefits”, it says that the measure will improve health and well-being, help employees achieve a better work-life balance and help improve family life. For me and my constituents, that is incredibly important, because we face a problem whereby a minority of our young people are engaging in serious violence. A number of stabbings and shootings are taking place in my constituency almost every month. There are many reasons for that, and there is no one magic solution to resolving these issues, but I am clear that we need to help adults spend more time with their families. Extending the right to request flexible working to parents of 17-year-olds—teenagers in that key group—is essential to helping them provide the guidance that many young people need in my community.
Mr Umunna: I will give way shortly.
I have come to the Chamber from this morning’s Treasury Committee sitting, where I asked Jonathan Portes, who until February was chief economist at the Cabinet Office, about this issue. I asked him whether abolishing the right to request flexible working for the parents of 17-year-olds would make a big difference in increasing GDP or growth. He made it very clear that scrapping the extension will “do nothing for growth”. I then asked HSBC’s chief economist whether he would be revising his GDP figures as a result of the scrapping of the measure, and he told me that he would not.
This measure seems to be a gimmick, which tends to suggest that the Government think that watering down employee rights is a substitute for a properly thought out growth strategy. All the figures I have just presented and all the arguments I have just made for the introduction of the extension, which was planned for April, are in the Government’s own impact assessment of the measure. Will the Government think again about it? I grant that they do not and will not accept our arguments to revise their plan for fiscal consolidation, but I suggest that it would be very wise for them to think again on this small measure.
Mr Deputy Speaker (Mr Lindsay Hoyle): I call Gavin Williamson, who has until 5.42 pm—about three minutes. I am sorry about that.
5.39 pm
Gavin Williamson (South Staffordshire) (Con): Thank you for calling me to speak, Mr Deputy Speaker. I am for ever astounded by Opposition Members and their total denial that their party had anything to do with the financial mess that this Government are sorting out. My grandfather always used to say to me, “You spend what you earn and you never borrow on the never-never.” The only economics that Labour Members seem to understand are the economics of the never-never—never worrying about how much money they were borrowing and never worrying about how much money they would ever have to pay back.
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Ever since I left university in 1997, I have worked in manufacturing. I am proud of that and I am proud that the Government are doing something for manufacturing to reverse the decline we have suffered. It is about time that we had a Government who care about this and who will sweep away the regulations that have stifled manufacturing. When I was running a pottery business, I used to go to many countries across the globe—I can even proudly boast to be probably the only Member of Parliament who has sold chinaware to the Chinese— and whether I was in Germany, Italy or France, the Governments spoke to their businesses and wanted to know how to help them best, minimising regulation and helping businesses to succeed. That is the ethos that I believe has been spelled out in this Budget and it is one that I welcome.
I also want to pass on my thanks to the Chancellor for the fact that he has listened to representations from me and many other colleagues on community investment tax relief. In my constituency, that will help the Black Country Reinvestment Society, an organisation that is helping businesses, giving them small loans to help them grow and prosper. That will have a positive impact and I thank the Chancellor and colleagues on the Front Bench for listening.
This country faces many great challenges, which we have to deal with, and rebalancing the economy is the core one. I believe that this Budget makes strides to achieve that and that it will do so.
5.42 pm
Ian Lucas (Wrexham) (Lab): We have had an important debate this afternoon on a vital subject, following on from yesterday’s Budget statement—a statement that, unfortunately, largely followed the course mapped out by the Tory Government, with their allies, in the announcements that they have made in the last year.
I hoped today that the long-trumpeted plan for growth, which has been so elusive as far as the Department for Business, Innovation and Skills is concerned, would be revealed in more detail. We have had the document, but the Secretary of State barely referred to it. In his speech he did not even mention enterprise zones, or provide any more detail or information to expand on the fairly threadbare set of initiatives in the document.
The Government inherited growth and have taken it away, they inherited falling unemployment and have caused it to rise, and they have squandered the low inflation that they inherited. The result, in constituencies up and down the country, is a profound lack of confidence in the future. The prospect of falling living standards is restricting demand, businesses are failing to invest, and as a consequence, joblessness continues to grow. The Government need to recognise the malign effects of their policies, but unfortunately the Budget offers more of the same—the same policies that have taken the country backwards, not forwards.
At least now the Government are talking of growth. They took a long time even to do that, and they have now given us a document, but that document takes us backwards again—back to a Thatcherite prescription for what is wrong with the economy, reheating policies that led to an unemployment count of 3.5 million twice under Tory Governments in the 1980s and 1990s. As we have just heard from my hon. Friend the Member for Streatham (Mr Umunna), the same thing is beginning
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to happen again. The OBR has identified that unemployment will be higher than it predicted last year because of the Government’s policies.
Lest we forget, the legacy of those years in the ’80s and ’90s was not success but a wasted generation of young people. What is so depressing about this Budget is the realisation that the Tories have learned nothing from history and intend to repeat it instead—and it is shameful that the Liberal Democrat allies they now have are acting as their accomplices. It makes me sick to the stomach to see the Liberal Democrats being more vehement than the Tories in their defence of Government policy in the Chamber, because they stood on the hustings and told the people who were fooled into voting for them exactly the opposite when they were asking for those people’s support.
The proposals put forward by the Government offer nothing new. Even the names bring back memories of the 1980s, with enterprise zones coming back from the dead. Those of us whose politics were defined by the mistakes of the 1980s remember that enterprise zones were not a success then. As Helen Miller, a senior research economist at the Institute for Fiscal Studies, said in response to the Budget:
“Past UK experience with enterprise zones suggests that their main effect may be to cause activity to relocate rather than to create new activity.”
We must recognise that the introduction of enterprise zones follows the dismantling of machinery to deliver regional growth. Local enterprise partnerships are still nascent and the Budget does nothing either to resource them adequately or to take them forward any further. They must do their work without assets or resources, and decisions on the allocation of resources are still being made not locally but centrally by the centralised regional growth fund. The hon. Member for Redcar (Ian Swales), who is not here today, pointed out in a debate in Westminster Hall earlier this week that 97% of grants given out by One North East were for less than £1 million, which is below the threshold for securing financial assistance from the regional growth fund. Where will small businesses secure the finance that was previously available to them? We must wait to see the detail of the proposal for enterprise zones, as we did not hear any more detail about them today, but I suggest that there is a vital gap in relation to small businesses, which needs to be dealt with.
The Budget is made in the context of a crisis in the construction industry, but the Secretary of State did not mention that industry in his statement. This week, the Federation of Master Builders reported that the proportion of firms reporting higher work loads fell from 22% in the fourth quarter of 2010 to 19% in the first quarter of 2011. Even this Government have finally recognised that their rhetoric on planning change and localism has had a profoundly negative effect on the construction sector and the housing market. Their move, in the Budget, to introduce a presumption in favour of development is a tacit admission of that fact. Equally, the crisis regarding first-time buyers, which the Government have ignored until now, is real and has had a profound impact. Any move to assist first-time buyers is welcome, but the help for only 10,000 for only one year is, as the Construction Products Association has today pointed out,
“a very modest step and is unlikely to make much of a dent in the 100,000 shortfall of new build that this sector is currently facing.”
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We hear a lot of rhetoric from the Government about deregulation, but the action is less convincing. We have the “one in, one out” soundbite, but what about the groundwork—the hard work—of taking forward the regulation agenda of the Better Regulation Executive and the Regulatory Policy Committee? Where is the Government’s forward regulatory programme? Will what was produced by the previous Government finally come through? I would love to see that programme, because the Government need to come clean about the regulations that are going to be introduced.
Gavin Williamson: Will the hon. Gentleman give way?
Ian Lucas: I do not have any time to give way; I am sorry. I know that the hon. Gentleman had only three minutes, but I have only nine.
We agree that the country needs to rebalance the economy, and that is why the Labour Government set up the Advanced Manufacturing Centre in Rotherham and the National Composites Centre in Bristol. I encourage the Secretary of State not just to reannounce projects that were set up by the previous Government, but to support manufacturing with some projects of his own. We welcome the progress made on the back of favourable exchange rates, but there are worrying signs in leading companies such as Pfizer and Novartis that we may be losing the edge that we previously enjoyed in hi-tech industry. There are real concerns that cuts in our universities sector will threaten our primacy in science.
When this Government set their course last year they made the wrong choice. Labour’s plan to reduce the deficit was measured and it was working. The Tory Government’s plan is reckless and is not working, a fact evidenced by the ending of growth in the last quarter. The Budget’s downgrading of growth figures is also a fact. They have undermined the fundamentals needed to deliver growth—adequate demand and confidence in the economy—and replaced them with a lack of confidence among businesses and consumers. The result is that there is a real risk of slipping back into recession. We believe that the evidence is there to justify the need for the Government to take a different course. They must change course before they create a further Tory—and this time Liberal Democrat—wasted generation.
5.51 pm
The Economic Secretary to the Treasury (Justine Greening): We have had an important and, in many respects, illuminating debate this afternoon. I will try to refer to all the contributions that have been made, but time is short so it will be difficult for me to take interventions.
We have been talking about two halves of a solution to a problem that itself has two halves. The first half of the problem relates to the economy: the imbalance in jobs and a business model for UK plc that was simply unsustainable in relation to the sectors and its regional impact. The second half of the problem relates to what we can do to tackle the huge problem in the public finances and the structural deficit handed over by the previous Government.
The first point to consider is the broken business model that the previous Government created for UK plc, which was simply unsustainable. First, it was
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unsustainable in terms of sectors. An uncontrolled boom took place broadly in one sector—financial services—and in one region. During the mid noughties, for every 10 jobs created in the south-east and London, only one was in the private sector and outside financial services, which clearly shows that the previous Government’s model simply was not working. That had a huge cost, as my right hon. Friend the Secretary of State for Business, Innovation and Skills has said. Since 1997 manufacturing has been halved and lost two fifths of its work force, and exports from the UK fell behind the rate of growth seen in the rest of the world. Meanwhile, household debt ballooned. We had a huge property bubble that was worse than the USA’s. As the shadow Chancellor knows very well, he allowed the banking sector to get dramatically out of control. The sectors across the UK economy were totally unbalanced, and we need to change that.
Secondly, the imbalance was regional. There was huge job creation in the south-east, but what about the rest of the country? That shows why we are right to make proposals in the growth review for enterprise zones, and I very much hope that Opposition Members will not allow their political prejudices to get in the way of their local communities being able to ask to be part of the enterprise zones as they are developed.
On the public finances, I listened to the hon. Member for Hayes and Harlington (John McDonnell), with whom I have previously made common cause on other issues. I have great respect for him and for his consistency, but I must say that on this occasion I disagree with his analysis of what we need to do, which seems to be broadly in line with that of his party. What is their solution in a boom? It is to spend more. What is their solution in a bust? It is to spend more. That simply is not a sustainable way to run an economy. In fact, the previous Government left our country and our people weighed down with public debt after maxing out the nation’s credit card. They eventually decided that they did not support tackling the deficit now. Instead, we hear from the shadow Chancellor today that he wants to do that later. He wants to pass on Labour’s debt to our children and grandchildren, which is totally unacceptable.
The hon. Member for Derby North (Chris Williamson) talked about decline, but what does he think happened under the previous Government? He should go and talk to people in manufacturing who saw their own competitiveness decline dramatically.
My right hon. Friend the Secretary of State for Business, Innovation and Skills and my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) talked about the utter denial that still exists among the Opposition, about not just the deficit and the public finances, but their thoroughly broken approach to running the UK economy. There was no humility or apology for any of that, as my hon. Friend the Member for Sevenoaks (Michael Fallon) said, and the fact that there is no recognition of the problem surely means that there will never be any solution from the Opposition.
The right hon. Member for Wolverhampton South East (Mr McFadden) seemed to think that we could suddenly wish away those problems and get over them incredibly quickly, but the challenges that the Labour party left this Government—two parties that have come
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together to work in the national interest to sort out that huge mess—will take some time to be met. There will be no quick fix, but we have early, immediate and continuing steps to resolve the problems that have been left for the UK economy and for our people.
We took immediate steps in the spending review and in the emergency Budget to lift people out of income tax. The hon. Member for Washington and Sunderland West (Mrs Hodgson) seemed quite dismissive of them, but I hope that she will not vote against them when the time comes. We took steps in the spending review to bring public spending back under control, and yesterday we took the next step, which was a Budget for reform and recovery and a growth plan to rebalance our economy and put growth and sector issues back on a sustainable footing.
Opposition Members seemed to suggest that we have not talked to business, but we have actually had more than 1,000 meetings, and if they look through the growth review and “The Plan for Growth” they will see that we have taken well over 100 steps to help businesses throughout Britain. Our message to them is that Britain is open for business.
We will have the most competitive tax system in the G20; we will make sure that Britain is the best place in Europe to start, finance and grow a business, which, as my hon. Friends the Members for East Surrey (Mr Gyimah) and for Skipton and Ripon (Julian Smith) said, is absolutely critical; we will have a more balanced economy by encouraging exports and investment; and we will have a more educated work force, who are the most flexible in Europe. Those are the ingredients for a rebalanced economy that creates sustainable jobs.
The hon. Member for West Bromwich West (Mr Bailey) did talk about jobs, but if he is concerned he should read the OBR report to the end, because it clearly says that our plans are projected to create a net 1 million jobs over this Parliament. I hope that Members from all parts of the House will support that. By the time we have finished, we will have a corporation tax rate lower than America’s, France’s and Germany’s, giving us the lowest rate in the G7.
Our second ambition is to make sure that Britain is a great place to start, finance and grow a business. In the World Economic Forum global competitiveness index, we fell from fourth to 12th. The shadow Chancellor breathes out in frustration at me reading out that statistic, but it is absolutely true, and we have had to combat it by abolishing £300 million of regulations and by introducing a moratorium, exempting businesses employing fewer than 10 people from new domestic regulation for the next three years. But, we are going to go further than that. To stimulate growth, we will double entrepreneurs’ relief and help SMEs by extending the small companies business rate relief for an extra year. We are doing our bit to help business, and I wish the Opposition would support that.
We have a whole range of plans to support different sectors, but manufacturing is crucial to rebalancing our economy, as my hon. Friend the Member for Erewash (Jessica Lee) and the hon. Member for Solihull (Lorely Burt) said. One reason why our economy became so unbalanced, and so regionally unbalanced, was the skew towards financial services, and we have to encourage other parts of our economy to grow, so we will do what we can to help manufacturing in particular.
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On enterprise zones, the boom left too many communities behind, and we are determined to ensure that as our economy grows, the communities that can benefit most from that will do so.
Our country should never again have to accept the economic decline that has taken place over the past decade —an irresponsible boom and bust, and an unbalanced economy that overheated and took our country to the brink of bankruptcy. The shadow Chancellor was at the heart of the decisions that were so catastrophic for our country: selling gold, PFI arrangements, structural deficit and catastrophic bank regulation. His utter denial of the role that his Government played in leading our country so near to ruin will leave the British public shocked and utterly bewildered as they watch this debate.
In conclusion, this Government are looking to right the wrongs of the past. Where others have failed, we will succeed.
6 pm
The debate stood adjourned (Standing Order No. 9(3)).
Ordered¸ That the debate be resumed on Monday 28 March.
Business without Debate
Draft Defamation Bill (Joint Committee)
That this House concurs with the Lords Message of 23 March, that it is expedient that a Joint Committee of Lords and Commons be appointed to consider the draft Defamation Bill presented to both Houses on 15 March (Cm 8020).
That a Select Committee of six Members be appointed to join with the Committee appointed by the Lords to consider the draft Defamation Bill (Cm 8020).
That the Committee should report on the draft Bill by Tuesday 19 July 2011.
That the Committee shall have power—
(i) to send for persons, papers and records;
(ii) to sit notwithstanding any adjournment of the House;
(iii) to report from time to time;
(iv) to appoint specialist advisers; and
(v) to adjourn from place to place within the United Kingdom.
That Sir Peter Bottomley, Rehman Chishti, Chris Evans, Dr Julian Huppert, Mr David Lammy and Stephen Phillips be members of the Committee.—(Bill Wiggin.)
Private Members’ Bills
That, notwithstanding the provisions of Standing Order No. 14(4), Private Members’ Bills shall have precedence over Government business on 9 September 2011, 21 October 2011, 25 November 2011 and 20 January 2012.—(Bill Wiggin.)
Mr Deputy Speaker (Mr Lindsay Hoyle): Since there is an amendment not supported by the Member in charge, I will follow the practice of my predecessors and treat it as an objection to the motion. Objection taken.
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Maternity Services (Hastings)
Motion made, and Question proposed, That this House do now adjourn.—(Bill Wiggin.)
6.1 pm
Amber Rudd (Hastings and Rye) (Con): I am worried and my constituents are worried. There are many issues that Members of Parliament campaign on in their constituencies, but those to do with health provision must be the most important. We can all agree that maternity services deserve to be a high priority in health planning. This is about the safety of mothers and babies.
Our hospital in Hastings, the Conquest, has a full-service, consultant-led maternity unit. Within East Sussex Hospitals NHS Trust, which we are part of, Eastbourne also has a full-service maternity unit. Four years ago, it was proposed that one of those units should close, and that we should have one midwife-led service and only one full maternity service for the area. The community rose up in arms. We campaigned in our thousands. We marched with babies and with prams. Every local MP objected, and we did not let up until we won—and win we did. I would like to pay tribute to the able, determined and dedicated campaign leaders, Margaret Williams and Liz Walke.
In September 2008, the decision was made by the Independent Reconfiguration Panel, which advised the then Secretary of State for Health, that both units should stay open with their full service. The chair of the IRP said:
“The needs of local women and their families were at the heart of this review…we concluded that women’s access to and choice of services would be seriously compromised if the proposals were implemented.”
The campaigners already knew that, but we were reassured and, indeed, jubilant that the final decision makers also took that view. This was nearly three years ago. Some people might, ask “What’s the issue now?” or “Why are you campaigning when there is no formal proposal for closure of either units currently on the table?” They would not share my concern—my unease—about the latest information coming out of East Sussex Hospitals NHS Trust. It is being signalled that there may be change in the air. It is not change itself we are frightened of, but the possible outcomes for mothers and babies.
The Care Quality Commission visited both hospitals in February this year, and it has raised concerns about the maternity services. The hospital trust, to its credit, was swift to contact stakeholders and MPs to inform them of this and to reassure us that action was immediately being taken to ensure high standards of safety and to address the concerns that the CQC had raised. I would like to thank the chief executive of the trust, Darren Grayson, for his swift action in disclosing this important information. I must confess, however, that we are not entirely reassured. We, the campaigners—my constituents—are still worried. I am not reading any motive or plan into the trust’s response to the CQC; I am simply here to highlight, once more, that the outcome of these concerns must not lead us down the very road we have travelled before—namely, having to protect our full-service maternity units.
We do not want to stick our heads in the sand. If there are problems with the maternity units that might impact on safety in any way, we must address them.
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However, this must not be a shortcut back on to the damaging road of trying to shut one of our units. We will not accept that. I urge the trust not to present that as the answer to the current problems. I would like the Minister to consider that in her response.
There are other answers, and they are in the very problem that the trust is highlighting—namely, staffing. The original decision to maintain both units urged the trust to address the issue of staffing by getting the right and safe mix of experience and qualifications among the doctors and consultants. The report of three years ago accepted that staffing was a problem, but critically it urged the PCT to
“consider alternative staffing models which have not been explored so far”.
“It is incumbent on the local NHS to explore the potential of these roles to develop midwifery careers and support doctors’ roles locally.”
It agreed that there was a problem, but urged the local NHS to develop a strategy to deal with it. But here we are. As was anticipated by the report three years ago, we have a staffing problem that may be impacting on the service, and in such a way that doubt is once more being cast on the viability of having two full-service units.
Each hospital handles about 2,000 births a year. I am pleased to say that the strategic health authority recently commissioned an external head of midwifery to review midwifery, leadership and staffing levels, and she confirmed that the trust was safe. The latest annual regional report also praised the trust for having the lowest caesarean section rates in the region, thereby supporting women to experience a normal birth.
Eleven consultants cover both sites, and we have our designated number of junior doctors. However, we are short of middle grade doctors. There should be eight at each site, but there are only seven at the Conquest hospital and six at the Eastbourne district general hospital. The gap is filled by locums, which is expensive. An agency locum costs approximately £79 per hour, which equates to £18,000 per agency doctor per month, as against a trust doctor, who costs approximately £9,000 per month. In these times of increased pressure on funds, even though NHS funding is ring-fenced the NHS is still being asked to make efficiency savings and to improve services. The locum costs are therefore an unpleasant and substantial addition to the hospital overheads.
Unfortunately, the staffing issue is exacerbated by the European working time directive. I know that the arguments against the directive for parts of the medical profession are being examined, but in the meantime the outcome of restricting working time to 48 hours per week simply puts yet more pressure on the staffing levels in these units.
I appreciate that some might say that I am panicking early. We have been reassured by the trust’s chief executive that there are currently no plans to close either unit, and a consultation is about to be launched on how to maintain a top service at both units. In this reassurance, there is a sting. It signals that the challenges of staffing may require a change. I fear that that could include the closure of one of the units. We must not let that happen.
The town of Hastings in my constituency has high levels of deprivation. Its teenage pregnancy rate is one
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of the highest in the country and, as we know, this country has the highest rate in Europe. Some 22% of its residents are in the bottom 10% according to assessments of deprivation. Local doctors, to whom I speak regularly, tell me that young women can be reluctant to attend antenatal classes and often miss their appointments. These are the women who may encounter unforeseen difficulties, and who may need a full-service maternity unit at their hospital. They are not the women who are likely to hop in their car to go to Eastbourne for their check-up. In fact, in many parts of Hastings car ownership is running at only 40%, so many would have to rely on the local bus services and the local roads. If the maternity service were closed, it would effectively put up barriers to safety for that group of young women.
I wish to say a word about the local roads, on which I hope to secure a separate debate. If we look on the map, we see that Hastings is just over 20 miles from Eastbourne, and the AA tells us that the journey can be done in approximately 20 to 30 minutes. It is quite wrong. It is in fact the equivalent of a 40 or 50-mile journey elsewhere, and in my experience it takes at least an hour. The Royal College of Obstetricians and Gynaecologists recognises the need for investment to support smaller units, such as ours, where there are significant distances involved. That is what we have in Hastings and Eastbourne—because of the nature of the roads, the towns are a significant distance apart.
Those of us who campaigned on the issue before know the arguments well, but we are up against what feels like the establishment. It is creating a tide that pushes us one way—to super-size maternity units, beloved of managers and some doctors but not particularly of mothers. Expectant women want choice, safety and accessibility. I can quite understand management’s preference for large units. It is easier to manage a larger group of people, more efficient for those delivering the service, more convenient for the consultants who are in overall charge and more flexible for training junior and middle-ranking doctors. However, we must not let the one-size-fits-all principle dominate our maternity services. We must remain aware of local issues that are relevant to any changes in configuration. In Hastings, I have mentioned geography, deprivation and the particular needs of some of the youngest, most vulnerable mothers in my constituency.
Although I speak up for the residents of my constituency, I urge the Minister to pay attention to the trend of addressing staffing issues in hospitals by moving towards super-sized units, particularly maternity units. “Bigger is not necessarily better”—that may sound like an extract from a nursery rhyme, but it is actually part of the name of a highly respected paper about the centralisation of hospital services. Even the well respected King’s Fund questions the assumption that outcomes are improved in bigger units.
Despite the conflicting views about smaller or larger maternity units, one thing is clear: the staffing issue is about preparing and planning. That was highlighted to the health trust more than three years ago in Hastings. We must demand more from our trust now, and we do not accept that closure should be considered for either of our full-service sites. We need the complete service. We need in our communities the delivery of a safe, efficient local service, for the continued delivery of safe and healthy babies.
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6.13 pm
Stephen Lloyd (Eastbourne) (LD): I thank my hon. Friend the Member for Hastings and Rye (Amber Rudd) for giving me an opportunity to speak in her Adjournment debate. I concur with everything that she said. I will take a limited time, because we want to listen to the Minister, but I wish to focus on a couple of separate matters. I add that my hon. Friend the Member for Lewes (Norman Baker) expressed specific concerns to me this morning, because many of his constituents in Polegate and Seaford use the district general hospital in Eastbourne.
I feel as though I have walked about 150 miles over the past few years for the “Save the DGH” campaign. It was an enormous, cross-party campaign with cross-community support, led in Eastbourne by a splendid lady, Liz Walke, and in Hastings by Margaret Williams. They are two fantastic, community-focused individuals who did a superb job in rallying their towns and all the political parties.
I shall quickly make a couple of points. I have never been a conspiracy theorist, but there is an exception to every rule. Just because I do not believe that there are conspiracies everywhere does not mean that they cannot sometimes exist. I have some good contacts in the district general hospital and I spent eight and a half years working in Eastbourne before gratifyingly winning the seat in the general election last year. I have developed some good contacts in the trust and, sadly, I must tell the Minister that I believe that the single-siters who originally wanted to move to one consultant-led maternity service have not gone away, despite being turned down by the Independent Reconfiguration Panel. I am afraid that they have used the pretext of the Care Quality Commission report to begin the process of moving to a single site.
As soon as we heard that, we were very active and we blitzed the media for 10 days solid. I believe that that led the trust’s chief executive to say that there were currently no plans to close one of the maternity wards even temporarily. The blunt reality is that there were such plans.
My hon. Friend the Member for Hastings and Rye mentioned middle grade doctors. Around the country, more than 30 different trusts with maternity wards deliver an outstanding quality of service without eight middle grade doctors. The issue is a smokescreen, I think that it has been seen as such and I will not tolerate it. I ask the Minister to speak to the trust board, expressly remind its members of the content of the IRP report and tell them to consider seriously options other than middle grade doctors. I think that this last option suits some of the consultants rather than the patients.
I am terribly keen to hear the Minister’s comments, so I will finish with a quote. I wrote to the IRP within 24 hours of the issue blowing up again two weeks ago. The other day, I got a response. For Hansard, I shall quote from it. It states:
“Dear Mr Lloyd…
As you note, in July 2008, the IRP completed a full review of the proposals to close the Eastbourne obstetrics service and advised that the case to do so had not been made. The IRP also made recommendations about what further action should be taken, all of which were accepted by the then Secretary of State for Health in making his decision.”
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I urge the Minister to assist my hon. Friend the Member for Hastings and Rye and me to keep an eye on the trust over the next few months and years because we, my hon. Friend the Member for Lewes, and thousands of residents in Eastbourne and Hastings are not prepared to countenance in any way, shape or form the closure of either of the consultant-led maternity wards in Eastbourne.
6.17 pm
The Parliamentary Under-Secretary of State for Health (Anne Milton): I congratulate my hon. Friend the Member for Hastings and Rye (Amber Rudd) on securing the debate. There is no more important issue for a politician or, indeed, a politician’s constituents than the health services available in their constituency. My hon. Friend spoke with passion about her concerns and those of her constituents. I note that she and the hon. Member for Eastbourne (Stephen Lloyd) paid tribute to Margaret Williams and Liz Walke, the campaigners from last time. They must have a heavy heart listening to or reading tonight’s debate. I do not think that my hon. Friend is panicking early. She is doing exactly what is right: highlighting early her concerns and fears in the light of some vigorous campaigning three years ago.
I would like to join my hon. Friend, as I am sure other Members for the area would, in paying tribute to the NHS staff in her constituency for their hard work and dedication. In common with NHS staff throughout the country, the health and well-being of the public is their driving motivation day in, day out. It is not an easy time for them, and we should not lose sight of that. The Government will support them and ensure that they have the power to provide people with the health outcomes that are consistently among the best in the world.
It would be remiss to pretend that the NHS is free from problems. It is right for people to be concerned when they see something going wrong. I can therefore understand why people in Hastings may have been anxious following the Care Quality Commission’s recent inspection. As my hon. Friend knows, the commission found that inadequate staffing was putting patients at risk, and that that affected the quality of services being provided in the maternity units and in A and E. From the very beginning, the Government have made it clear that safety must be at the heart of the NHS, and that substandard care will not be tolerated. I trained as a nurse and worked in the NHS for 25 years, and from my point of view, nothing but the best well do for the people of this country.
We expect the trust to work hard to resolve the issues raised, and my hon. Friend spoke quite warmly of its response. I understand that it is working closely with the PCT and the strategic health authorities to address the issues by 31 March. I hope and expect that it will meet that deadline.
My hon. Friend spoke of her constituents’ fears that the CQC’s concerns about the safety of the local maternity units will lead to the Conquest’s consultant-led maternity service being closed, and of the previous campaign on that. My constituency is not so very far away from hers. My constituents were also victims of “Creating an NHS fit for the future”, which I felt at all times was fit only for the bin.
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I know that in 2008 the independent review panel advised the then Secretary of State for Health that consultant-led services should be retained in both Conquest and Eastbourne hospitals. Both my hon. Friend and the hon. Member for Eastbourne felt that that would be an end to matters, and I understand why people in East Sussex now worry about a new threat.
I gather that East Sussex Hospitals NHS Trust has sought to calm those fears by stating publicly that there are no plans for the closure of either maternity unit. However cynical we might become when we have campaigned over time on local issues, we must take what we hear at face value and believe it. I am also aware that the trust has advised local MPs that it will look at various options for the future of maternity services, and that those services will be linked closely to paediatrics, emergency services and gynaecology. The review will have input from external clinical experts, which is crucial for the confidence of local people. Irrespective of their cynicism, it is important to stress that no decision has been made in advance, and that the trust has no plans to close any of the units.
However, I understand the concerns of local people and my hon. Friend. Whatever decisions are made, they must be guided by the trust’s principal responsibility to provide high-quality and safe care. Decisions must be made in an open and transparent way, with the involvement of GP commissioners, staff, patients and public, and with full, real and meaningful consultation. As she knows, I cannot speculate on or prejudge the optimum size of the unit or the outcome of the exercise.
It is right that decisions are made locally without central interference. The Government believe passionately that local decision making is essential in improving outcomes, and in driving up the quality and sustainability of services for different communities. My hon. Friend ably highlighted some of the deprivation and health inequalities in her constituency.
To that end, the Health Secretary has identified four crucial tests that all service changes must pass: they must have the support of GP commissioners; arrangements for public and patient engagement must be strengthened; there should be greater clarity on the clinical evidence base underpinning any proposals; and any proposals must take into account the need to develop and support patient choice, which my hon. Friend mentioned. That
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means that service changes that do not have the support of GPs, local clinicians, patients and the local community should not happen, which gives patients, local professionals and local councils a far greater role in how services are shaped and developed, and ensures that changes will lead to the best outcomes for local people. That is in line with our proposals in the Health and Social Care Bill, in which we have said that local NHS services must be centred on patients, led by local clinicians and free from political interference, whether from this House or the various layers of NHS management.
My hon. Friend raised, in particular, the working time directive. The coalition Government are committed to limiting the application of the directive in the UK. It has caused immense problems in the health service, and the Health Secretary will support the Secretary of State for Business, Innovation and Skills in taking a robust approach to future negotiations on the revision of the directive to achieve that greater flexibility.
I also draw my hon. Friend’s attention to the King’s Fund paper that questions the assumptions that outcomes improve in bigger units. The King’s Fund is right that an effective skills mix is important to get the best out of maternity units, and the Department of Health has commissioned the national perinatal epidemiology unit to undertake a study comparing the outcomes of births planned at home, in different types of midwifery units and in hospital units with obstetric services. That report is expected in autumn 2011 and will be very important in providing the evidence for further action on choice of place of birth.
I fully understand my hon. Friend’s reasons for calling this debate. She is right to raise the matter at this very early stage, so that local people are clear that they are getting the support from their local MP—that was quite apparent from the passion with which she spoke—and so that all those working in the health service are aware of her close involvement. I applaud her determination to press for local health services that best meet the needs of patients, and to ensure that whatever measures are taken, following the CQC report and this review, the overriding concern of those services must be the interests of the local people.