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We are finally getting to grips with a housing benefit system that has been allowed to run out of control. The failure to reform housing benefit has left us in the absurd situation whereby some benefit claimants can claim up to £100,000 a year to live in large houses in expensive areas. The local housing allowance formula was behind all this madness. I remind Labour Members that it was their Government who introduced the local housing allowance, which pumped fuel into that growth. The difference between the average award under the LHA and under the older schemes for private deregulated tenants that it replaced was an additional £10 per week, or about 10%. As a result, the costs of housing benefit rocketed from £14 billion in 2005-06 to £21 billion in 2010-11. Left unreformed, the housing benefit budget was projected to reach £24 billion in 2014-15. That is, frankly, unsustainable and unacceptable to hard-working British taxpayers.

Housing benefit is an issue on which Labour Members have shown themselves at their very worst. First, we got ludicrous claims about social cleansing from central London, whipping up fury and fear. [Hon. Members: “That started with you.”] No, it started with them, and I know exactly who it was. Then, on top of that, we were told that the real reason was that we are a Government bent on some kind of plan for ethnic cleansing. Labour Members are not averse to a bit of dog-whistle politics when it suits them, scaring some of the most vulnerable people in society and leading them to fear what is coming next.

The problem is that the Labour Government had over 10 years to get to grips with the welfare system, and literally nothing was done about it—it was fiddle, more fiddle, and more expense. The Office for Budget Responsibility has confirmed that as a result of the changes to expenditure that we brought through, we remain on track to eradicate our structural deficit over the course of this Parliament.

It is important, too, to reflect on how the Budget for growth has gone down with people. Sir Martin Sorrell says:

“The coalition from the very beginning had said it was crucially important that Britain had a competitive tax landscape. They've gone further than I expected on corporate”


“and also on personal taxation.”

He went on to say that

“it looks as though we will make that recommendation”

to return his company’s headquarters to the United Kingdom. That is a real endorsement.

A letter in The Daily Telegraph yesterday from 39 leading venture capitalists stated:

“These changes are a shot in the arm for enterprise. Thanks to them Britain is being positioned as a world-class place to launch new businesses. Now British entrepreneurs and those relocating to Britain will find it easier to raise the funds they need to do what they do best: create and expand world-beating businesses.”

John Cridland, the CBI director general, said:

“This Budget will help businesses grow and create jobs. The chancellor has made clear the UK is open for business.”

Alec Shelbrooke (Elmet and Rothwell) (Con): Hear! Hear!

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Mr Duncan Smith: Quite right; thank you for that.

David Rutley (Macclesfield) (Con): I wonder whether my right hon. Friend has seen the latest statement from the Institute of Directors, which says that 58% of company executives are now more confident about the long-term economic outlook, and that just 9% are less optimistic.

Mr Duncan Smith: I am bowled over by that—what can I say? That was a timely intervention by my hon. Friend. I apologise for not producing that point myself. It is yet more evidence that this Budget, which was shaped by my right hon. Friends the Chancellor of the Exchequer and the Chief Secretary to ensure that Britain is open for business, has opened it for business. That is what business men are saying.

I want to bring one more person to the attention of the House. This tribute is perhaps more difficult for the Opposition to cope with. It is from none other than Duncan Bannatyne—a great name. He said:

“This Budget has convinced me that George Osborne is serious about growth and enterprise.”

I remind the Opposition that he was a huge and strong supporter of the previous Government. Even when almost every other business man had deserted them, he still supported them. To use his own wise words, he has said, “I’m in!” I think that the rest of the country is too.

Getting to grips with the public finances is just the starting point, not the destination. Of course we have to balance the Budget, but this Government are about much more than that. Our ambition is to make the next decade the most dynamic and entrepreneurial in Britain’s history. That is why we have set out plans to create the most competitive tax system in the G20. That is why we are reducing the rate of corporation tax yet further from 28% to 26% in 2011-12, and crucially, all the way down to 23% from 2014-15. That will give the UK the lowest rate of corporation tax in the G7. I thought that I would hear a cheer from the Opposition for that, because they must surely want that to happen. Perhaps they do not.

That ambition is why we are making the UK the best place in Europe to start, finance and grow a business. We are supporting small firms with a moratorium on domestic regulation, which will give them a real chance to plan and to get going. We are investing £100 million in science capital development. That ambition is also why we are encouraging investment and exports as a route to a more balanced economy. We are setting up 21 new enterprise zones with superfast broadband, lower taxes and low levels of regulation and planning controls.

From our perspective, we can see that even as the economy grew under the previous Government, too many people in this country missed out. More than half the additional jobs that were created went to foreign nationals. It is therefore hardly surprising that youth unemployment was higher when we came into office than when Labour took power. As growth picks up again, we have to ensure that this group does not miss out once more. Some 900,000 additional jobs will be created over the course of this Parliament, and our welfare reforms are about ensuring that our people are ready and able to take them.

The previous Prime Minister spoke about British jobs for British workers, but the reality is that most of the jobs did not go to British workers. That point is not

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about immigration, but about supply and demand. We have to ensure that British workers are ready and able to take the jobs. That is why this Budget introduces new and hugely welcome measures to provide extra support for young people. They will be helped to find sustainable jobs in the private and voluntary sector. We will fund an additional 50,000 apprenticeship places over the lifetime of this Parliament, and importantly, 40,000 of them will be targeted at the young unemployed. That is on top of the 75,000 places announced last year.

Overall, with the new measures in the Budget, the Government will deliver at least 250,000 more apprenticeships over the next four years compared with the previous Government’s plans. Those apprenticeships will be very valuable, because they will give young people in particular, but others as well, real training, real skills and a proper job at the end of it.

Alongside that, we are aiming to assist in the process of getting apprenticeships by providing up to 100,000 work experience places over the next two years. Those placements will last a minimum of eight weeks, rather than the two weeks made available under the previous Government. We will also offer employers an extra linking month when it will provide a route into an apprenticeship. If an employer says after the eight weeks that they will put a young person into an apprenticeship, or even into work, we will be prepared to give the young person an extra month of work experience so that the employer can sort out whatever is necessary without having to let them drop out of the company.

That work experience will be a crucial head start for young people. As David Frost of the British Chambers of Commerce said in January:

“Employers will be key to getting young people into work. This programme is a way of not only providing quality work experience but also of introducing individuals to the modern world of work.”

The programme has also got the backing of Hayley Taylor, star of Channel 4’s “The Fairy Jobmother” series, whom I saw the other day—a great woman. She has said:

“It’s hard to get a job with no experience, and you can’t get experience without a job. That’s why this work experience scheme is a really good idea.”

However, this Budget is not just about securing the position of workers today; it is also about securing their position in the future, as they enter retirement. We have done a great deal for current pensioners. We have restored the earnings link and given a triple guarantee that the basic state pension will rise by the highest of the growth in average earnings, the prices increase or 2.5%.

Stephen Lloyd (Eastbourne) (LD): Hear, hear.

Mr Duncan Smith: Yes, exactly. That will provide a really generous state pension that gives a firm financial foundation. Someone retiring today on a full basic state pension will receive £15,000 more over their retirement than they would have done under the old prices link. We have also permanently increased cold weather payments from £8.50 to £25.

Notwithstanding the prospects of today’s pensioners, the prospects for the next generation are very different. I hope that Members of all parties will recognise that those who are not near to receiving their pension, and who perhaps are just starting their career, face a very difficult time indeed.

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Albert Owen (Ynys Môn) (Lab): On the subject of pensioners, was the Secretary of State as disappointed as I was that the Chancellor did not have the guts to mention in his Budget statement that he was reducing the winter fuel allowance from £400 to £300? His decision not to continue with the £400 payments comes after he said they would be protected and permanent in future. Some 12 million pensioners will be upset by the Government’s policy not to continue with them at a time when bills are going up year on year.

Mr Duncan Smith: I am interested that the hon. Gentleman raises the matter, because it was originally mentioned in the comprehensive spending review. We have stuck to the last Government’s plans on the winter fuel payment. In fact, I was intrigued by the issue so I looked up what the right hon. Member for Edinburgh South West (Mr Darling), who is in his place, said when he was Chancellor. He said a lot of straightforward things, and I congratulate him on that. He said about the winter fuel payments that they

“were temporarily increased to £250, and £400 for the over-80s…I will guarantee this higher winter fuel payment for another year.”—[Official Report, 24 March 2010; Vol. 508, c. 263.]

When we look at the Red Book produced at the time, we find that there was no allocation for any more winter fuel payments. We stuck to the last Government’s plans. Perhaps the hon. Member for Ynys Môn (Albert Owen) should ask his right hon. Friend why he did not plan for more. We did exactly what we said we would do.

The real problem is that 7 million people are not saving enough for the retirement that they want, and few will be able to rely on a guaranteed income in retirement, because the numbers saving in defined benefit schemes in the private sector have more than halved in the last 20 years. In fact, less than half of the entire working-age population is currently saving in a pension at all.

Our plans automatically to enrol all workers in a pension scheme will make a real difference—we have continued the work started by the previous Government—but my hon. Friend the Minister and I do not think that auto-enrolment will work unless it pays people to save, which is why we have determined finally to get to grips with the state pension. As all hon. Members know, not only is the state pension extremely complex, leaving millions of people unsure as to what they will receive in retirement, but it completely fails to reward those who make the effort to save but who do not quite get there.

Too many people reach state pension age having scrimped and saved all their life to find that others, who have not saved or who have made no effort to save, get the same income as them through pension credit. The Budget is about rewarding those who do the right thing, which is why we will shortly publish a Green Paper on state pension reform, with an option for a single-tier state pension, which will provide a clear foundation for saving. We currently estimate that it will be set at around £140 a week, which is above the level of the means-tested guarantee credit, but we must send out the clear message across the welfare and the pension systems that people will be better off in work than on benefits, and better off in retirement if they save.

Glenda Jackson (Hampstead and Kilburn) (Lab): If the change in the pension system is to benefit the whole country and all pensioners—current and future—why

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have the Secretary of State’s policies targeted specifically women born between ’53 and ’54? They expected to retire, but now discover that they must work at least four years longer. That does not strike me as a policy that benefits the entire population.

Mr Duncan Smith: The hon. Lady’s comment on working four years longer is simply incorrect, but I take what she says. The reality is that the Government are doing what we were asked to do—equalise the ages—and increasing the age to 66. I recognise the group she mentions, but they will be covered and supported in other ways anyway, so this is not a loss—

Glenda Jackson: It is a specific, targeted group.

Mr Duncan Smith: It is not a specific group in the sense that they were targeted. That policy is part of trying to get the pensionable age up first to 65, and then to 66.

Mr Frank Field (Birkenhead) (Lab): The House will be pleased that the Government want to move to a standard pension of about £140 a week, but how will that be paid for? Will it be by pooling the contributions of those who have already paid under the national insurance and state earnings-related pension schemes? If so, how many will lose out, and what sort of message would that send to people about saving?

Mr Duncan Smith: First, we will publish the Green Paper very shortly. We are finalising it, so I do not want to get into the full detail now, but I promise the right hon. Gentleman that we will answer all such questions. Less means-testing is the key. I leave him with that thought, but I will tantalise him not much longer: there is some really good stuff coming in the Green Paper, and I am sure he will find every reason to support it, given that he has been so positive about pensions for many years.

Alec Shelbrooke: Like many hon. Members, I have received representation from constituents who wonder why there is a two-year jump in the pensionable age. Will the Secretary of State outline why that must be done?

Mr Duncan Smith: That is to do with the process of equalising, which we are doing slightly faster. It is in the interest of the nation and individuals for us to do that. If we do not do it, there is a cost implication, which could be as high as £10 billion. I say simply to my hon. Friend that if the Opposition and others do not want to do that, they should please let us know where they think the money will come from.

We are making responsible choices for the British economy. I am particularly proud of the decision we took with my right hon. Friend the Chief Secretary to the Treasury on the potential for a single-tier pension. That is in stark contrast, I think, to the mess we saw from the previous Government. What is interesting is that the Labour party has been out of power for 10 months, but listening to what Labour Members say about the current situation, one would think that it has been more like 10 years and that they had nothing to do with it.

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They do not know whether they are coming or going. Interestingly, half of them seem to support the Darling plan, and the other half do not. For the shadow Chancellor, it rather depends on who asks him, when they ask him, and what time of day it is.

It seemed that the Labour party would not cut, but then we heard that theoretically it would. More frightening still, it has made it clear how it would spend more of our money. Notwithstanding the plan set to start on 1 April, in the past month or so, the Opposition have made some £12 billion of unfunded spending commitments, which actually makes their spending profile even worse. They will tell us that it would all be funded by an extra tax on the banks. Oh dear! I remember that they used to attack the Liberal Democrats for making a similar claim over the extra 1p on income tax. They said, “This is the longest p in history.” Well, this is now the biggest, longest tax in history. It would have to be raised at least six times to pay for the sort of commitments they have engaged in. However, we should not be surprised to discover that fiscal mathematics is not Labour Members’ strong point.

Now we see the Leader of the Opposition joining a march for an alternative solution. I personally hope he has found it, but I do not think he did on the podium the other day. Instead, we see that he is now linked with some of the great names of history: the suffragettes, the anti-apartheid movement and Dr King in America. I am pleased that the Leader of the Opposition also has a dream, but for us it is not having a dream that matters, but that soon enough he should wake up and smell the coffee. The reality is that this Government are sorting out the deficit; this Government are getting Britain back to work; this Government are dealing with the mess that Labour left; and meanwhile they are in denial.

4.57 pm

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): I know that the Secretary of State learned some time ago that attack is the best form of defence, but I expected him to do a better job of defending the Budget that we heard last week. The Budget debate started with no acknowledgement that growth was coming down—and the same is true of its conclusion. The right hon. Gentleman refused to admit that this so-called Budget for growth has knocked 0.5% off the rate of growth this year and next, put unemployment up by 200,000, and is putting the benefits bill up through the roof—and he seems to think that we are the ones in denial.

A fortnight ago, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), who has responsibility for work, was rolled through the television studios and asked to give his progress report on how well the Chancellor had done in his first year. He was asked to report on how good a job the Chancellor was doing of getting the country back to work. Fifteen months after the end of the recession, the House could be forgiven for expecting unemployment to be falling rather than rising. However, at the very point when unemployment should be falling, the Minister was forced to report that it was actually rising. He decided to choose his words very carefully. He said that the jobs market was “stabilising”.

Last week it was left to the Chancellor to tell us that the jobs market was doing nothing of the sort. He did not dare spell it out, but in the fine print of the Budget

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we learned the truth: this is not even the beginning of the end. His first year has gone so well that unemployment, which should be falling, is set to rise until the summer. In fact, it is not expected to fall below 2.5 million until way through next year. Now we face the prospect that unemployment is not going to fall below 2 million for the rest of this Parliament.

Kwasi Kwarteng (Spelthorne) (Con): Will the right hon. Gentleman give way?

Mr Byrne: Perhaps the hon. Gentleman can tell us what he thinks of that.

Kwasi Kwarteng: Will the right hon. Gentleman remind the House which member of the previous Cabinet wrote a note saying, “There’s no money”?

Mr Byrne: I would rather have written a bad joke in public than a bad Budget in public.

Now we know—and now the Secretary of State has been forced to admit—that unemployment is not going to fall below 2 million. He will remember, just as we remember, the last time that happened. For those with long memories, what has happened is all too familiar. The last time the Tory party was in office, it took a couple of years to get unemployment above 2 million, but after that it did not fall below 2 million for 18 years, until the Labour party was elected in 1997. Now the Government have decided that that record of the 1980s is worth a rerun, or something of a repeat, because there is one thing that has not changed: the Conservative party still believes that unemployment is a price worth paying.

Alec Shelbrooke: I am grateful to the right hon. Gentleman for giving way, and I am listening carefully to him. While we are discussing the figures, does he welcome today’s news that construction grew by 2.3% in quarter four, and that productivity was also up?

Mr Byrne: Of course, and the hon. Gentleman will also recognise that, despite the fact that we are some way out of the recession, today’s figures also confirmed that in the last quarter for which records are available, the economy shrank. I am not sure that that is a record of which he can be proud.

In the circumstances, I would have thought that the House could expect to hear rather more from the Secretary of State about what the Budget would do to get people back into work. The Office for Budget Responsibility is well aware of the Secretary of State’s Work programme and the Chancellor’s tax breaks on offer for business, yet its conclusion was the cold fact that unemployment will continue to rise. Every time the Chancellor stands up at the Despatch Box to deliver a Budget, he revises down his forecast for growth and revises up his estimate for the number of unemployed people in our country. He is costing this country a fortune.

What, then, did this Budget offer for jobs? Incredibly, it said that by the first quarter of 2013, unemployment would be 200,000 higher than was forecast just last October. What a triumph! Under the circumstances, we could have expected a rather bigger push from the Secretary of State and his right hon. Friend the Chancellor to get people back to work. After all, his Minister for

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the unemployed, the right hon. Member for Epsom and Ewell, told the Select Committee on Work and Pensions on 14 March:

“If there was a very substantial change in the labour market, one way or the other, frankly, that is the kind of circumstance in which we might need to revisit some of the assumptions.”

Well, 200,000 more people on the dole sounds like rather a substantial change to me.

What is the Government’s response? Some £20 million for work experience. This morning I had a look at the Secretary of State’s accounts for January. It would appear that his new work placement scheme, which was so proudly trumpeted this morning, will cost less than his Department spends on stationery every year. At the very least, we would have expected more resources for the Work programme. The Prime Minister is fond of telling us that the Work programme is

“the biggest back-to-work scheme this country has seen since the 1930s.”—[Official Report, 16 February 2011; Vol. 523, c. 951.]

In fact, as the BBC has shown, there are 250,000 fewer places on it than Labour had last year, when unemployment was lower. The association of bidders for the Work programme now has so much confidence in the Secretary of State’s plans that it says:

“the design of the Work Programme is fraught with risks which may impact significantly on the number of unemployed people who can benefit from it”!

That is hardly a vote of confidence. When my hon. Friend the Member for Westminster North (Ms Buck) asked the Secretary of State how much extra he had received from the Treasury to get people back to work, he refused to give her a straight answer, and we all know what that means: that he asked for nothing and he got nothing. With unemployment now forecast to rise, the very least that we could expect from this Secretary of State is to stand up for his Department, fight his corner and get some extra help to get this country back to work.

Mr Tobias Ellwood (Bournemouth East) (Con): The right hon. Gentleman understands that whoever had won the last election would have had to introduce some tough measures, and we are experiencing those now. Bearing in mind that all other recessions have seen unemployment rising, is he genuinely telling the House that if Labour had won the last general election, unemployment would be continuing to fall today?

Mr Byrne: Absolutely. We expected and anticipated falling unemployment, because what we were not doing was cutting so much so fast, or damaging the rate of growth in this country.

Mr Ellwood: The right hon. Gentleman is being very generous in giving way, but this is an important point. Labour was in denial before the election about introducing major measures to bring the economy under control. Labour now knows—as we have known—that important measures needed to be introduced after the election. That is what is causing the difficulties now. He is now saying, “Yes, you’d be able to bring those measures in without having any effect on employment.” That is completely wrong; he misleads the House.

Mr Byrne: Well, let us go through it, shall we? The deficit plan that we put in place would have involved £57 billion-worth of discretionary action—[ Interruption. ]

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Will the Secretary of State just pause for a moment? I know that he has read all 40 pages of chapter 6 of the Budget that was published in March last year, but let me just remind him of their contents: £57 billion-worth of discretionary action; £19 billion-worth of tax rises; and £38 billion of cuts, £18 billion of which would have fallen on capital, and £20 billion of which would have fallen on current expenditure, of which £12 billion would have fallen in Whitehall, £5 billion would have fallen on lower priority projects and £3 billion would have been achieved through a pay freeze and asking public sector workers to—

Mr Deputy Speaker (Mr Nigel Evans): Order. I just want to clarify that the hon. Member for Bournemouth East (Mr Ellwood) meant that the right hon. Gentleman was inadvertently misleading the House.

Mr Ellwood: Of course.

Mr Deputy Speaker: Thank you.

Mr Byrne rose

Mr Duncan Smith: Will the right hon. Gentleman give way?

Mr Byrne: Of course.

Mr Duncan Smith: Now that the right hon. Gentleman is into the Darling plan, will he specify what those cuts are, what he supports right now, and therefore what the plan really is? After all, it was due to come into force three days from now.

Mr Byrne: I have just gone through them. They involved £57 billion-worth of discretionary action—[ Interruption. ] The difference between us—[ Interruption. ] Well, let us take the Secretary of State’s own Department. Regarding the £18 billion savings in annually managed expenditure, we said that where there is a temporary switch from RPI to CPI for the next three years, we will support that; where there is a need to reform the disability living allowance, we will support it; and where there is a need to introduce new limits on employment and support allowance, we will support that. We do not think, however, that the Government should introduce reform simply by cutting. They should couple some of those reforms with the need to look again at the support that working families actually need.

Mr Duncan Smith: Okay, now we are into this specifically. DLA reform has a line item in the Budget of about £1.4 billion in savings. Does the right hon. Gentleman consider that to be a reduction that he supports?

Mr Byrne: The Secretary of State put in place a programme to make the cut before he figured out what reform was actually needed. He is under such pressure from disability groups because he is not listening to the voices of disabled people in this country telling him what kind of support they need in order to live full and fulfilling lives. That is because he is locked into a programme that is putting more people on to the dole and sending benefits bills through the roof. He is beginning

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to fracture the bonds of support between the Government and the people in this country who need extra help. He should not be abolishing DLA; he should be reforming it. He should also start listening to the needs of disabled people.

Mr Duncan Smith: I am intrigued by this. The right hon. Gentleman now seems to be at odds with his shadow Chancellor, who in his opening speech in the Budget debate last week, in response to a specific question about what spending cuts he wanted in the coming year, said:

“We said…that we would go ahead with the disability living allowance gateway reforms.”—[Official Report, 24 March 2011; Vol. 525, c. 1142.]

That involves £1.43 billion. Does the right hon. Gentleman support that now?

Mr Byrne: No, because we have not specified—[Hon. Members: “Ah!”] We have not specified the level of cuts or savings that we think should come from DLA. The Secretary of State knows as well as I do that we believe that a gateway should be introduced for DLA—[ Interruption. ] He should listen to this, because it speaks to the concerns of millions of people with disabilities. He has said that he is going to cut £1.4 billion from DLA, and, in written answers to the House, he has said that 170,000 fewer people will receive that benefit in the future—[ Interruption. ] The Secretary of State might just want to listen to the implications of this. It is a bit late for him to be getting a briefing on his DLA reforms from his own Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller). If he is cutting DLA for 170,000 people and cutting £1.4 billion from that benefit, £8,500 will be cut from each of those 170,000 families. Will he intervene on me again and tell me whether he understands that that is the implication of his benefit cut?

Mr Duncan Smith: I have a very simple question. The shadow Chancellor said that he supported the reform, which has a very simple line item in the Red Book. The right hon. Gentleman now says that he does not support it. This is the problem: the Opposition have no idea what they are doing. No wonder the British public are fed up with them.

Mr Byrne: We have made it quite clear that we support reform of DLA, but what we do not support is a top-down, cuts-driven agenda that will deny support to 170,000 disabled people in this country. That is the wrong approach; the Secretary of State needs to think again.

Alec Shelbrooke: The right hon. Gentleman is most generous in giving way. I have just listened, as has the rest of the House, to a whole host of numbers that he reeled off relating to where cuts would be made, but he has not said where those cuts would be made, or what exactly would be cut. Will he enlighten the House?

Mr Byrne: The deficit reduction plan that we put in place is spelt out in 38 pages of the March 2010 Budget. Will the hon. Gentleman tell me whether he has read it? [Interruption.] No, obviously not.

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Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): Does my right hon. Friend share my astonishment that the Secretary of State can produce savings figures, yet when we put specific questions to him we are told, “This is a matter for review”?

Mr Byrne: Precisely right. Indeed, the Secretary of State presented to the House of Commons a Bill that would abolish DLA before he had even bothered to finish consulting people up and down the country about what the reform of DLA should look like.

One of the greatest failures stemming from the Secretary of State’s inability to extract further money from his right hon. Friend the Chief Secretary to the Treasury is, of course, the failure to get young people back to work. I met a delegation of young people from my constituency this morning and I asked them what they thought of the Government’s plans. Their thoughts were very simple: it just seems, they said, that the Government are stopping young people being what they could be. I could put it no better myself. Youth unemployment is now approaching 1 million. The Secretary of State likes to pretend—he did it again this afternoon—that this is somehow a problem that he inherited. [Interruption.] What he fails to remind us is that in the final nine months of our term of office, youth unemployment was falling by 67,000.

I know that the right hon. Gentleman is fond of quoting figures that do not include the number of people in higher education, for example. Fine: let us look at what the figures tell us. Since the election this is what has happened: after nine months in which youth unemployment was falling, it is now going up by 60,000—and that when the economy is supposedly growing. All the good work we did is now completely undone.

Mel Stride (Central Devon) (Con): The right hon. Gentleman said that if Labour had won the last election unemployment would, of course, be falling. He raised the issue of youth unemployment, so will he inform the House whether youth unemployment fell or rose during the period of the last Labour Government?

Mr Byrne: All unemployment fell. Then, once the scale of the global recession we confronted became apparent, it of course went back up again. What we never had under a Labour Administration is unemployment going up through the 3 million mark—not once but twice, as it did under the Conservatives. Every job lost is a tragedy for one family, and all the jobs lost are a tragedy for all of us—and, indeed, for the Exchequer. Lost jobs mean not only that our performance as a country cannot match our full potential, but that a bill is created that we all end up paying.

The Governor of the Bank of England has warned us of what is to come. He says that we now confront the biggest squeeze on living standards since the 1930s, and that because this Government’s economic plan is creating so few jobs, there is less and less demand for workers. Now there are five people chasing every job and the growth in people’s pay packets and wages is slow. The Office for Budget Responsibility forecasts 2% earnings growth this year, 2.2% next year, but when prices are growing by more than 5% this year and 3.6% next year, the squeeze on family budgets is now all too obvious.

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In the circumstances, one would have thought that the Government would step in to help. Not a bit of it. Next month 10 Tory raids on the family budget get into full swing: tax credits cut for families earning more than £40,000; tougher criteria on families wanting to claim family support; reducing the income disregard; freezing basic rates of working tax credit; removing the baby element of child tax credit; reducing payable costs of child care; abolition of grants for pregnant mums; £500 taken away from families with more than one child; child benefit increases ruled out for another three years; and cancelling the child savings accounts.

This Government are proud of some of the measures foisted on them by Liberal Democrat Members. I am sure that is right. Once we take this list into account, however, £1.1 billion is going to be stripped from family budgets starting from next month, with another £300 million coming from children. By the end of this Parliament, £16.5 billion will have been taken out of family pay packets.

Richard Drax (South Dorset) (Con): Will the right hon. Gentleman give way?

Mr Byrne: No.

Why are the Government not doing more to help? Because the cost of economic failure is sending the benefits bill through the roof. Last week we learnt from the detail of the Budget book just how big that bill has now become.

This afternoon the Secretary of State liked to boast about his reforms of housing benefit, but forgot to tell the House that the housing benefit bill is projected to rise by more than £1 billion in the next few years. In the small print of the Budget we saw something more: his benefits bill over the next few years is now projected to increase by £12.5 billion. That is £500 for every household in the country.

Almost as shocking is what will happen to the unemployment bill as a result of the Secretary of State’s great endeavours to get so many extra people back to work. When the Chancellor came to the House last year, he somehow forgot to tell us that as a result of his Budget higher unemployment figures would increase the dole bill by £700 million. Now we learn that it is going to go up again, by another £1.9 billion. In other words, since the Government came to office they have put the unemployment bill up by £2.6 billion. That is an indictment of their record in getting people back to work. In fact, £2.6 billion is the same amount that the Government are cutting from tax credits for people with children. The right hon. Gentleman is cutting support for our children in order to pay the bills for his economic failure.

What does this mean for the average British family? A single earner family with a child and an income of £23,000 will lose £400 a year. The Secretary of State may not care about what is happening to ordinary families, but I assure him that plenty of people are interested in the bills for his economic failure. Households with child care costs will be hit even harder. A family with average child care costs will lose nearly £500 a year, and for some it will be even worse. A single earner on the minimum wage with two children will lose more than £2,000 a year—6.5% of his or her income. Even for low earners, any gains that they make as a result of

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changes in income tax and child tax credits will be wiped out by the VAT rise. The Secretary of State is squeezing Britain’s families harder than ever to pay for his failure to get the country back to work. Does that not sound all too familiar?

Stephen Lloyd: In my constituency, the average family household earns £27,500. According to the BBC’s calculator, if the household contains two children under 16 and both parents are working, the family will be just over £700 per annum better off as a result of the Budget.

Mr Byrne: But the challenge from this Budget is that there are simply not enough winners, because the bills for sending people to the dole queue rather than back to work are now going through the roof. Surely the hon. Gentleman recognises that more than £2.5 billion in extra dole bills does not constitute a wise use of public money. If only the Chancellor would do more to get people back to work, the squeeze on working families would not be anywhere near as hard.

Finally, we must ask what the Budget means for some of the most vulnerable people in our country—the people who are in need of help from the wider community, and those who need extra support in order to live a full life in one of the world’s biggest economies. I know that, like me, the Secretary of State believes that a country as rich as Britain should have high, not low, standards of civilisation and compassion—but the Chancellor is pressing ahead with measures that will deny thousands of people their independence. The question that the House must ask is: what is the Secretary of State doing to stop it?

The right hon. Gentleman told the House yesterday that after his review of DLA had been completed the mobility component for people in care homes would still exist, but he still cannot explain why the Chancellor announced that he was taking £400 million more out of the mobility component than previously planned. The Budget confirmed that he would press ahead with his abolition of DLA. I repeat that we support the right kind of reform of DLA, but no matter how he tries to dress it up, he is taking £2.9 billion out of a well-targeted benefit, and he himself is saying that 170,000 fewer people will receive the benefit by the end of the Parliament. That is £8,500 per family. With figures like that, surely he can understand why so many people with disabilities up and down the country are so worried.

Finally, it was confirmed in the Budget that the Government are pressing ahead with their plans to limit employment and support allowance to just one year. The Secretary of State has a chance to fix that in Committee on the Bill, but the Budget confirmed an ambition to save £3.5 billion from people on ESA. However, he knows as well as I do that many people do not recover from cancer in under 12 months, and he also knows that cancer charities up and down the country are now asking him to think again.

The Minister of State, Department for Work and Pensions (Steve Webb): Will the right hon. Gentleman give way?

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Mr Byrne: No, because I want to make an important point to the House. The Minister’s Department knows that three quarters of cancer patients still need ESA after one year. The message from the charities to the Front-Bench team was blunt. They say:

“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”

Will the Minister confirm that he will withdraw this terrible measure?

Steve Webb: I am grateful to the right hon. Gentleman for giving way. He tried to frighten disabled people by saying the average DLA loss was £8,500 per year. Does he think that figure is right?

Mr Byrne: Well, the Minister will know as well as I do how much he is cutting from DLA, and he knows as well as I do how many people he anticipates will receive the benefit in the future. He can do the maths as well as I can. The obligation is on him to come clean and be straight with people with disabilities. What will the reform of DLA mean for them? Will he drop this measure from his Bill?

This afternoon we have heard a pretty poor defence of a Budget that puts more people out of work, fails to deliver on ambitions for our young people, and hits families harder than ever to pay the bills of economic failure. Worse still, it begins to endanger the contract of a proud and civilised country with the people who need help most. This is not a big society; it is a society in which the bonds that tie us together are weaker and weaker. This is not a Budget that is working; it is a Budget that is hurting—and the Chancellor should think again.

Several hon. Members rose

Mr Deputy Speaker (Mr Nigel Evans): Order. Please resume your seats. As Members can see, more than 40 colleagues have applied to take part in today’s debate, so there is a six-minute limit on speeches, with the usual injury time for two interventions. As happened yesterday, persistent interveners will be moved down the list. I also remind Members of Mr Speaker’s instruction to them not to approach the Chair during the debate to find out where they are on the list. Those who can finish their speeches in less than six minutes will be helping colleagues. I call Mr Peter Lilley.

5.23 pm

Mr Peter Lilley (Hitchin and Harpenden) (Con): I congratulate my right hon. Friend the Chancellor on sticking to his plan to reduce the Budget deficit. Far from these cuts being too much, too deep, too soon, I believe that what he has proposed is the minimum over the longest credible period that we can reasonably expect will enable us to avoid the sort of financial crisis that has hit many neighbouring countries.

I want to address an illusion. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne), whom it is normally a privilege to follow, based his speech on it, and it permeated the speech of the Leader of the Opposition at the weekend when he addressed the large rally on cuts. It is the illusion that we can have something for nothing. We live in a world of finite resources. If we

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spend more on one thing, we have to spend less on another. If we spend more now, we must expect to spend less—substantially less—in future, when we repay our debts with compound interest. The Opposition do not seem to realise that. I would be more than happy to engage in debate with either of them if when they advocated the restoration of spending in one area, they simultaneously spelt out the additional cut they intended to propose in another area of spending, but they never do so and the right hon. Member for Birmingham, Hodge Hill did not do so today. As long as hon. Members refuse to spell out alternative cuts to those that they reject, rational debate in this place is simply impossible.

Mr Deputy Speaker, I know that you are well aware that the ancient states of the Peloponnese resolved these problems by rules of debate that required those advocating increased spending on programmes that would require extra taxation or more borrowing to stand up in the public forum on a platform and argue their case with a noose around their neck. If they succeeded in persuading their fellow citizens of the need for increased spending and taxation, the noose was removed, but if they failed, the platform was removed. I understand that this healthy discipline meant that those states remained solvent for centuries on end.

Mr Edward Leigh (Gainsborough) (Con): The slight problem with that is that if we had a similar system here, under whichever Government, there would be no Members of Parliament left.

Mr Lilley: That is slightly unworthy of a former Chairman of the Public Accounts Committee, who at least would remain, if in solitary glory.

A related illusion that the Opposition purvey is the call, frequently made by the Leader of the Opposition, for the Government to prepare a plan B in case the economic road gets rocky—a plan B would, by implication, involve higher spending and borrowing. Of course it is a bit rich for the Leader of the Opposition to ask for a plan B, given that he has not yet spelt out a plan A, but the reality is that if we abandon the plan set out by the Chancellor, we will get a plan B, but it will not come from the Opposition or from my right hon. Friend the Chancellor—it will come from the savers and pension funds whose money we would need to borrow to finance that increased borrowing. If we did bottle out of what we have proposed, they would demand deeper cuts over a shorter period and they would require us to pay a higher rate of interest. The net result would not just be deeper cuts in the public sector, as we have seen the markets impose on Portugal, Greece and Ireland; those higher interest rates would kill off and abort the recovery in the private sector on which we depend to create the jobs to take up the people not employed in the public sector. So it would be a disaster for this country if we were to go down that route.

The third illusion that some Labour Members purvey—perhaps the more honest elements among them—is the belief that we could avoid public spending cuts if we were prepared to put up taxation. But who would pay those higher taxes? Ultimately, taxes are always paid by individuals and if the squeezed middle are not going to pay them—they have been precluded from bearing a higher burden of taxation by the Leader of the Opposition —either the poor or the rich must do so. I would not put

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it beyond a party that sought to double the burden of taxation on the lowest paid by removing the 10p tax rate to seek extra revenues from the very poor, but that would not yield much money so Labour must look to the very rich for it. I just remind Labour Members that if they read the Red Book, they will see that the top 1% of income tax payers in the coming year are expected to pay no less than a quarter of the entire revenues of income tax—last year, the top 5% paid more than half of all income tax. We are reaching the point at which any further burden of taxation on those people would kill the goose that lays the golden eggs. In the words of my old friend, the sadly now deceased Lord Harris of High Cross, punitive taxes beyond a certain point do not redistribute income, they redistribute people. We have reached that point and we would go beyond it if we accepted the advice of the Opposition.

I urge my hon. Friends to support the Chancellor and my right hon. Friend the Secretary of State in what he is doing at the Department for Work and Pensions and to ignore the blandishments and illusions of the other side.

5.30 pm

Mr Alistair Darling (Edinburgh South West) (Lab): In the short time available, I shall not follow up on any points made by the right hon. Member for Hitchin and Harpenden (Mr Lilley), except to say that when he talks about any element of fairness in the Chancellor’s last Budget and this Budget as regards those on the top incomes, I think he will find that some of the things he talks about have more to do with measures that were announced by the previous Government than with those announced by this Government.

In many ways, the Budget is an annexe to last June’s Budget, which set the direction for this Government and the tone for this year’s Budget. I want briefly to consider how that will impact on this country as well as what is happening in other parts of the world. Although it does not quite fit the Tory story, what is happening to our economy will be very much influenced by what is happening in other parts of the world.

In some ways, it is quite remarkable that the global economy is growing at all. Three years ago, when the International Monetary Fund reported for the first time that it had stopped growing, it was possible that we were in for a serious downturn. It is now growing, but it is a two-speed recovery that is strong in Asia and far less so in the west. In Europe, we see strong growth in Germany and far less growth in southern Europe in particular. Here at home, manufacturing is doing well because the pound has depreciated, but the service and business sectors are not doing so well at all.

The recovery in this country and in Europe is fragile. We saw the economy grow more strongly than we expected in quarters two and three—the summer and autumn of last year—although again that had an awful lot more to do with measures that were implemented before rather than after the general election. We saw a sharp slow-down after that, which was largely brought about by people’s fear of what was to come. People are losing confidence—we saw the confidence survey published just after the Budget last week—and that should worry any Government. If we continue to get sluggish growth, the risk is that we will bump along the bottom and we will not get the jobs or growth on which this country depends.

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Incidentally, I followed with interest what the Secretary of State said but one question that he failed to answer was that put by my hon. Friend the Member for Wolverhampton North East (Emma Reynolds): if our spending was so wrong, how come the Conservatives supported it right up until the end of 2008 and the Liberal Democrats supported it until a week after the general election, when they promptly changed their minds? The Secretary of State has revealed this afternoon that he is not quite the details man I remembered, but he might care to note that our structural deficit in 2006, according to his Government’s own measure, was 0.4%. It is simply not true to suggest that all our problems today are the result of spending. The main problem that we faced was an acute banking crisis that hit us and hit other countries in the world. That is why we are not the only country to have a very large deficit.

Mr Duncan Smith: I am listening to the right hon. Gentleman with great interest and respect, but I want to get this absolutely straight because one of his right hon. Friends said this the other day. The OECD measurement of the UK’s structural deficit in 2007 was 3.9% of GDP, the highest in the G7. Can he confirm that?

Mr Darling: The structural deficit was 0.4%. Throughout the past decade, we were spending money, but I must say, as a Minister in that Government, we were greeted with calls from the then Opposition not to spend less but to spend more on just about every occasion. They cannot have it both ways.

What worries me is that as we look forward, we face a number of pressures that are a threat to sustained recovery in this country. We, along with most other European countries, are following a deflationary policy and we are doing it together. This is not like Canada or Sweden 10 years ago, who reduced their deficit on the back of rapidly expanding neighbouring economies. That will have an effect. America, sooner or later, will have to deal with its very large debt problem that has been overhanging that country since the Bush years. That is not a recent phenomenon but it will have to be dealt with and it will have a knock-on effect on the rest of the world’s economies.

On inflation, for 10 years we in the west have lived off cheap goods coming from the far east. Now what is happening, as one would expect, is that those economies are growing and there are inflationary pressures. Commodity prices are increasing and wages are starting to go up, so those days are finished for us. It worries me that we are likely to face deflation as a result of Government policy with inflation as well. All that will result in lower growth, which is exactly what the Office for Budget Responsibility has said.

Mary Macleod (Brentford and Isleworth) (Con): Does the right hon. Gentleman agree that many measures in the Budget will stimulate growth in future?

Mr Darling: I think there are many measures in the Budget, such as the reduction in corporation tax, the reform of planning law—if the Government can see that through their Back Benchers and councillors—and some others that will be helpful, but the thing that

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drives whether companies set up, take on more people or put in more investment is whether they can sell their goods and services. For as long as companies doubt that that is the case, we are going to have this problem with lack of confidence and we simply will not get the levels of growth that we expect.

That is why the story of this Budget was in many ways what the OBR—now independent of Government, which is a good thing—had to say. For the third time in 10 months it has downrated the growth that it expects in this country over the next couple of years and that should worry us. Yes, it picks up after that, but I suspect that is a function of the model that the OBR adopts: if growth is depressed in the short term, it is automatically assumed that growth comes back. However, I cannot see any evidence of where that growth is going to come from, either in the world economy or in Europe, especially if the eurozone insists on following what I regard as punitive policies towards those peripheral countries that are getting into trouble—visiting on Greece and Ireland conditions that I do not think they will be able to meet. Sooner or later, they will have to renegotiate or default, and the eurozone countries—principally Germany, which is the main driver of what is happening in the eurozone—will have to rethink the policies they are currently adopting. Otherwise, there will be a risk not only that Europe will fail to grow but that parts of it will go back into recession. That would be an absolute tragedy for the people living there and would also be extremely bad for us.

I have mentioned the uncertainties in the United States, but here at home we still have problems with the banks and their inability to lend. I recognise all the difficulties in that regard. I endured much criticism from the parties now in government when I was in charge of these things, but interestingly they have come up against exactly the same problems that I did, which is why their attempts to make the banks lend have had exactly the same reception as mine did. Next month, we will have the Vickers report into the future of banking but there is a risk that if we spend a long time discussing these matters and there is a lot of uncertainty about what should happen with the banks, that uncertainty will lead to lending being depressed. I hope there will be a full debate on the Vickers inquiry after the Easter recess, but I hope also that the Government will move to a conclusion one way or another in reasonable time. There is still uncertainty about banking regulation, particularly in Europe, and I regard the stress tests now being put in place as wholly inadequate and repeating the same mistakes that were made last summer. It is high time that we got to grips with this problem, which has not yet been resolved.

On the financial services sector, there is a lot of talk about rebalancing our economy and I am in favour of that, but we need to make sure that we build up other sectors of the economy and that we do not end up inadvertently running down one sector, which happens to employ more than 1 million people in this country.

Finally, it is important to recognise that in 2008 and 2009 international co-operation managed to prevent our collapsing into the abyss. There is a limit to what can be done through international agreements but they do matter when we are dealing with currency imbalances, trade talks, energy and so on. I hope that the Government will re-engage in that regard and will recognise that the

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policy they are currently pursuing within the United Kingdom runs the risk of derailing the recovery, meaning a long, slow recovery that will not bring the growth and jobs we need.

5.38 pm

Andrew Griffiths (Burton) (Con): I am grateful for the opportunity to speak in this important debate. I begin by paying tribute to the Budget that was delivered by the Chancellor which has been warmly welcomed in many parts of my constituency. It was particularly warmly welcomed by the people involved with the Staffordshire air ambulance, who feel that they will benefit greatly from the changes to charitable giving. As the president of the East Staffordshire Community and Voluntary Service, I have been contacted by many charitable and third sector groups that believe this is a real way for them to build for the future and offer more help and support in the community.

The Budget was also well received by businesses in my constituency. The changes to corporation tax will be a big boost to growth. Businesses were delighted to hear talk of manufacturing, which they feel has been overlooked and forgotten for so long in this country. To hear a Chancellor and a Government talk about manufacturing was a boost for businesses and they are excited about the future.

The Budget was welcomed by families in my constituency. The poorest families were pleased that many of them will now be taken out of tax completely. More importantly, it was welcomed by many in my constituency who feel that it reinforces what many of them consider the most important plank of what we as a Government are trying to achieve—that is, to make work pay. The decision within the changes to personal taxation to make it more rewarding to go out to work and to support people back into work has been welcomed not only by those who do the right thing, pay their taxes and work hard, but by many people who are desperate to get back into work and feel that this is a great opportunity which will make it more financially viable for them to do that.

However, there is one element of my constituency where the Budget was not so well received. It is fitting that the former chairman of the all-party parliamentary beer group should be in the Chair when I make these points. I must declare an interest as the MP for Burton, the home of British beer—the home of Marston’s Pedigree and Carling Black Label, and Punch Taverns, the largest pub company in the country. Brewing and the future of pubs are hugely important. This is an issue on which there is usually agreement across the Chamber. The need for us to support the brewing industry and pubs is recognised in all parts of the House.

We regularly have debates, particularly in Westminster Hall, about what we can do to support pubs and the brewing industry, and there is general support across the House, even from the shadow Minister with responsibility for pubs, the hon. Member for Derby North (Chris Williamson), who in a recent debate admitted to us that not only was he teetotal but that he did not use pubs very often. Even he recognises the need for us to support pubs and the brewing industry.

I recognise that the Chancellor was hamstrung when he inherited a massive deficit—£120 million a day in interest payments alone—and a decision to increase

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beer duty by means of the beer escalator by 7.2% this year. It was somewhat unfair of the Chancellor to say in his statement that there would be no changes to beer duty in the Budget. Whether it was his fault or not, we will see an increase in beer duty equivalent to about 10p a pint. That will impact on brewers across the country and on publicans in each and every one of our constituencies.

We all support the community pub. We all recognise that a pub is a safe environment for us to enjoy alcohol and for us to encourage young people to drink safely and responsibly. Increasing beer duty by 7.2% is a major problem, particularly because beer duty in the UK is already 7.9 times greater than in France, 12.4 times greater than in Germany and 12 times greater than in Spain. We have the second highest beer duty in Europe. I hope the Government will look again to see what they can do to support brewing and the beer industry in this country.

For instance, the Government could look at the inequality between cider and beer. Why is it that a pint of cider attracts half the duty that is charged on a pint of beer brewed in my constituency? I welcome the Government’s decision to reduce tax on beer of 2.8% strength. That is very useful, but I urge them to go to Europe, fight the case on behalf of British beer, and raise that 2.8% to 3.4% or 3.5% so that we can have some great British beer and support our pubs in the process.

5.45 pm

Jack Dromey (Birmingham, Erdington) (Lab): This is a Budget for growth: growth in insecurity, growth in inequality and growth in unemployment, which was up by 27,000 in the west midlands last month alone. It is not a Budget for economic growth, which was down last and this year and will be down next year, as are living standards. Not only is unemployment up, but so too are borrowing, inflation, debt interest payments and higher debt interest, which is up by £17.8 billion. Yes, the Budget contains some modest measures, but despite evidence that the economy is getting into choppy waters and despite the widespread concern being expressed, the Government remain lashed to the mast, rejecting any but plan A and sailing on regardless, oblivious to the consequences of their actions.

I want to focus on the consequences for the people of Erdington and Birmingham of the Budget measures of the past nine months in relation to the public, private and voluntary sectors. In the public sector, this Friday 1 April we will see the biggest cut in local government history—£212 million. It is a Budget launched by a laughing Conservative leader and supported by a Liberal Democrat deputy leader who only 24 hours earlier had been one of those who wrote to The Times to protest about the scale and speed of the cuts being imposed on local government.

The consequences will be felt by everyone, whether they are three, 13 or 73: three-year-olds who go to one of Birmingham’s excellent children’s centres will find the centres’ budget cut by 16%; 13-year-olds who go to one of Birmingham’s 60 excellent youth service centres will see many of those centres face closure; and 3,500 73-year-olds, those who built Birmingham and Britain, face losing their care packages altogether, which for them make the difference between a decent life and a life on the margins.

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Mr Lilley: What would the hon. Gentleman cut instead?

Jack Dromey: Bankers’ bonuses and, as our Front-Bench team proposes, among other things, we would have a sensible programme of investment, just as we invested in the construction industry to get it going at a time of recession, providing 110,000 homes, 70,000 jobs and 3,000 apprenticeships. We would invest now in a fresh stimulus package of much-needed social housing, creating jobs, apprenticeships and hopes. That is what we would do, and that is the difference between them and us.

The police, too, are feeling the consequences. This Friday 300 of the most experienced police officers in the west midlands will be forced out under regulation A19. I was with five of them this morning. They included an inspector, the national champion of designing out crime, who on one Birmingham estate achieved a 97% reduction in crime levels; a sergeant leading an excellent team of neighbourhood policemen; and a detective constable, the specialist in robbery, who has put away those who robbed old people at cash points and those who robbed shops with a machete. They all now face having to leave the force against their will. The Government have said to them, “Thanks for your past loyalty, but here’s your notice.” Governments should cut crime, not the police.

With regard to the impact on the private sector, 1.2 million people in that sector depend on public expenditure, particularly the £38 billion spent on local government procurement. If local government budgets are cut by 28%, major job losses in the private sector are inevitable. The estimate for the midlands is that 67,000 jobs will go as a consequence of what is happening in local government.

On rebalancing the economy, the Government have abolished the most successful regional development agency in Britain—Advantage West Midlands—and put in its place local enterprise partnerships that have no money, no power, no statutory basis and no power over skills. The planning proposals are a cocktail of confusion and the regional growth fund has only a third of the funds that were available to the RDAs. Incidentally, the RGF is the most elastic fund in history, designed to cope with all sorts of applications according to the Government.

Then there is the impact on the voluntary sector, the good society. Billions will be lost to the voluntary sector, including, in Birmingham, the oldest citizens advice bureau in Britain and 13 advice centres—all facing closure. The CAB was founded in 1938 and is the quintessence of the good society. Excellent people give first-class advice with an army of volunteers, but, just when the people of Birmingham need their support and advice most, those centres are facing closure.

My constituency of Birmingham Erdington is one of the 10 poorest in Britain, but it is rich in talent, with young people who are deeply aspirational and want to get on. What now haunts the people of Erdington is the spectre of the 1980s and TINA: there is no alternative. I know families in Erdington, Kingstanding and Castle Vale, where excellent men and women in the 1980s were made redundant two, three, four, five times. Some of them never worked again, because they gave up hope. The idea that once again the spectre of mass unemployment should haunt north Birmingham is absolutely wrong.

Stephen Lloyd: Is the hon. Gentleman aware that, after 13 years of Labour Government, there are 2 million children in households where no one works?

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Jack Dromey: We acted, by way of a range of measures, to help the poorest families, including the poorest families with children. It is a record of which we are proud.

There is a fundamental difference between the Government and this Opposition, not just on economic strategy but on this point: for us, unemployment will never, ever be a price worth paying.

5.52 pm

Martin Horwood (Cheltenham) (LD): The cornerstone of this Budget is undoubtedly the need to tackle the deficit. Spending £50 billion a year just on debt interest, which is double what we spend on transport, was clearly intolerable and could not go on. If we had not tackled the deficit, we would have found that an Irish, Greek or Portuguese economic future awaited us all, meaning more cuts, more public billions down the drain and higher interest rates, which would have hit everyone with a mortgage, everyone with an overdraft and every business dependent on bank borrowing. There is no point pretending that the cuts are not painful, but interest rates of 7%, 8% or higher would have been extremely painful, too, so I am glad that the Chancellor did not take that risk.

I am also very glad that the Chancellor is well on the way to fulfilling a Lib Dem election pledge to take more than 1 million people out of income tax, benefiting 24 million more by raising the income tax threshold. That will take nearly 2,000 of my constituents out of income tax altogether and benefit nearly half the population of the town.

There are also many welcome measures in the Budget for business and for investment. The cut in corporation tax will help small businesses in my constituency; I hope that we will benefit from some of the 40,000 new apprenticeships for young people not in education, employment or training; and it would be churlish of me not to mention the redoubling of the Swindon to Kemble line, which will be good for Cheltenham, good for business and good for the environment.

Good for the environment, too, will be the tripling of the endowment to the green investment bank to £3 billion, and the news that that bank will in due course be able to borrow on its own account. That is an important signal to green investors, and it will help us to lay the foundations of a low-carbon economy. So, too, will the commitment to a floor price for carbon, and, although £30 a tonne by 2020 is a pretty modest ambition, it gives an underlying message and confidence to those investing in green industry and green jobs.

I hope, however, that the measure will not lead to an accidental, back-door subsidy to the nuclear industry—not just to new nuclear but to the existing nuclear industry, which already costs us £1.5 billion of public money a year to clean up and close down. That is important, because any subsidy to the nuclear industry would run counter to specific pledges made in opposition by both Conservative and Liberal Democrat spokesmen, and I know because I was one of them.

I have a few other slight worries about the Budget. Not all red tape is bad, and I am concerned about the relaxation of the rules to be able to request flexible working. In my experience as an employer, I found that flexible working generally increased staff commitment and productivity. Progressive and innovative companies are trying to do more of it, not less.

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My biggest worry about the Chancellor’s speech is about planning. He said that

“we will introduce a new presumption in favour of sustainable development, so that the default answer to development is yes.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

It may have been a shame that he did not have the space or time to explain that statement more fully, because, on the face of it, it is rather alarming. Not all development is sustainable, so how can the default answer possibly be yes?

I hope the Chancellor was guilty of no more than radical oversimplification, but one or two other statements in “The Plan for Growth” give cause for alarm. It states that the Government will enable

“businesses…to bring forward neighbourhood plans and neighbourhood development orders.”

There are many definitions of a neighbourhood, which was not clearly defined in the Localism Bill, but I am pretty sure that a business is not a neighbourhood.

“The Plan for Growth” states also that the Government will

“localise choice about the use of previously developed land, removing nationally imposed targets”.

I do not welcome nationally imposed targets, but it is important that localities are able to prioritise brownfield sites over greenfield, and any qualification of that ability would not be helpful.

Possibly the most alarming news of all in “The Plan for Growth” is:

“Local Enterprise Partnerships (LEPs) will be able to play a vital role in supporting local authorities plan for key sub national infrastructure… providing a powerful voice for business in the planning system”.

My constituents generally think that business has a pretty powerful voice in the planning system already, as it usually deploys battalions of barristers and consultants, but “sub national” worries me, because it has unfortunate echoes of Labour’s old regional spatial strategies.

People in the parish of Leckhampton with Warden Hill in my constituency know a bit about regional spatial strategies. They fought a battle against the south-west RSS for many years, and they are still fighting to protect the last substantial green space in the parish from disappearing almost completely. Such green spaces next to urban populations are vital for people’s health and physical welfare. They are opportunities for recreation; important for local food production; they absorb carbon dioxide and particulate pollution; and they are the most visited parts of the country and treasured by local people. Once lost, they are gone for ever, but they are exactly the spaces being targeted by developers, who in the past were supported by Labour’s myth that endless growth in urban extensions was sustainable. It simply was not.

The Localism Bill offers local communities real hope and the prospect that they will have a voice in the future of their own areas—

Mr Deputy Speaker (Mr Nigel Evans): Order.

5.58 pm

Chris Ruane (Vale of Clwyd) (Lab): I was hoping and praying that this Budget would offer some employment chances for the people in my constituency. It has done

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nothing for employment chances in Vale of Clwyd; in fact, it has increased the chance of unemployment there.

There are 650 parliamentary constituencies in the UK, and of the top 50 for percentage of jobs in the public sector—including Edinburgh South with 67% and Swansea West at No. 50 with 41%—76% are Opposition constituencies and only 24% are Government constituencies. That speaks volumes. The policies that the Government are drawing up are policies not for Britain, but for the Tory and Liberal Democrat areas of Britain, and that is not one-nation conservatism. We are seeing on the economy the same partisanship that we saw on constitutional issues.

There are 13,000 public sector workers in my constituency.

Martin Horwood: Will the hon. Gentleman give way?

Chris Ruane: I am not giving way.

There are 10,000 public sector workers in the neighbouring, Conservative constituency of Clwyd West. [ Interruption. ] I will give way to the hon. Gentleman.

Martin Horwood: Does the hon. Gentleman think that the policy of the pupil premium, which is gearing education funding towards schools supporting the least well-off families, will support more Conservative and Liberal Democrat constituencies than Labour ones?

Chris Ruane: I will deal with that shortly; the hon. Gentleman does not have to worry about that.

In my constituency, there are already six people chasing one job. If the Government implement these 10% to 25% cuts in the public sector, another 2,000 to 3,000 people will become unemployed, with 20 people chasing each job. The Government state that they want the private sector to take up the slack of jobs in the public sector. What have they done to promote that in my constituency? Nothing. One of the biggest employers in north Wales is Sharp, which has the biggest solar panel factory in the whole of western Europe. There is also Kingspan in Delyn. In my constituency, we have the Technium OpTIC centre, which has the biggest solar panel in the whole of the UK. The changes to the feed-in tariff that the Government have announced will mean that these sectors are hit, and there will be job losses, not job expansions, in my constituency. An article in today’s edition of The G uardian stated that the UK had gone from third to 13th in green technology jobs in one year. This is not a green Government.

Young people in my constituency were looking to the Chancellor to help them to gain employment. They had help from the previous Government—a Labour Government. In my constituency, the Rhyl city strategy put 450 young people back to work in the space of 12 months. They were given hope; they were given a wage packet; they were given a future. All that has ended. The last day of the future jobs fund is tomorrow; after that, there will be nothing like it in my constituency.

Another article today in The G uardian mentioned that seaside towns and communities have the worst deprivation in the country. This Government did nothing to help those seaside towns; in fact, they worked against them. The changes that they have made to housing benefit will mean, as Boris Johnson has said, a Kosovo-style

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clear-out of the inner cities, especially London. Where will those people go? They will go to houses in multiple occupation in towns such as Weston-super-Mare, Hastings, Margate, Jaywick, Rhyl, Colwyn Bay and Blackpool. They will be moved from areas of employment to areas of unemployment, where slum landlords will make money out of misery—helped, aided and abetted by the Conservatives, who are altering the rules and regulations on the licensing of slum landlords.

Stephen Lloyd: Is the hon. Gentleman aware that according to figures that I received last week on Eastbourne, which is of course a splendid seaside town, the unemployment rate for February 2011 was down by 340 compared with February 2010? We welcome anyone to whom we can hope to give jobs in Eastbourne, which has a successful economy.

Chris Ruane: What will the figures be in February 2012?

I speak from the perspective of a Welsh MP in a seaside town in an area with high public sector employment. We had made progress under the Labour Government, who created an extra 7,000 jobs over a 13-year period, with 3,500 in one business park alone—St Asaph business park, built by the Tories, empty under the Tories, and full under Labour. We were able to achieve that because we engaged with Europe. We applied for objective 1 funding—something that the Tories never did in their 18 years—and we got it. In my county of Denbighshire, we have had £124 million over the past seven years to create jobs, and we have done that. We have engaged with the Welsh Assembly Government; I give some credit to Plaid Cymru in this regard. Plaid Cymru and Labour, in a proper, working coalition, have pumped £38 million into five principal seaside towns along the north Wales coast: Prestatyn, Rhyl, Towyn, Kinmel Bay and Colwyn Bay. We have engaged with the Department for Work and Pensions in running national pilots in Rhyl—the Rhyl city strategy and Fit for Work.

We have put hundreds of people back to work, not by shaking a big stick at them but by engaging with them. I am talking about drug addicts, alcoholics and ex-prisoners who are now making honey on a farm in Wales. I am talking about Rhyl football club, which is using football as a means to connect with parents and children. I am talking about Rhyl college and the Hub young people’s centre, which has 1,000 young people engaged with the back-to-work agenda. We have made progress, but all that is under threat from the Budget that we have witnessed.

We saw the Tories at work in the 1980s. We have seen what they did to coal, steel and inner-city communities. Remember the riots; remember the closure of the pits and the steelworks. That legacy is still being felt in many of those communities today. I make a prediction: if specific help is not given to areas with high public sector employment, then we will be looking at those areas as the new coal, steel and inner-city communities of this Parliament. Specific help must be given; otherwise, it will be back to the future—back to the 1980s.

6.6 pm

Stephen Metcalfe (South Basildon and East Thurrock) (Con): I am grateful for the opportunity to speak in this important and wide-ranging debate. As many people

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know, I come from a small business background, and so I take an active interest in the health of our economy and companies of all sizes. I was absolutely delighted to hear last week’s statement by my right hon. Friend the Chancellor, who put growth very much at the heart of his agenda to support businesses. He has very little wriggle room—we recognise that—but the creative approach that he adopted to try to demonstrate his support for businesses, large and small, and to help companies start on the path of creating jobs again, was welcome up and down the country.

We have to contrast that with the landscape that we inherited from our Labour colleagues. I do not quite know how to put it—whether it was neighbours at war or a family in crisis—but the situation was very much that they had maxed out the credit card and ceased to open the post. Time and again, I hear a degree of denial from Labour Members saying that we do not face a real problem, but we know that we do, because when we got round to opening the post, what did we find? A message stating that all the money had gone. That is what we have to deal with.

When I talk to people in businesses around my constituency and the south-east of England, all I hear is that they understand the need for the measures that we are taking, but they want us to remind them, the public, again and again of why we are having to do this—the fact that we are paying £120 million a day in interest alone and having to borrow £400 million a day to keep the country afloat. It is against that background that we have to find a way of balancing the books. I believe that my right hon. Friend the Chancellor started that process last week. Many organisations, such as the Institute of Directors, the Federation of Small Businesses and the British Chambers of Commerce, agree. They all welcomed the measures, in part, because they understand the problems.

I want to focus on three areas. First, there is the support for business. The cut in regulation is welcome as a stated aim, as is the focus on better skills for our young people so that we can have a well-trained work force. Secondly, I welcome the support for entrepreneurs, because it is they who will take a small business and grow it into a big business so that it pays its tax and employs, we hope, many thousands of people. Thirdly, there is the simplification of the tax system.

However, the people to whom I speak also express some concerns. At a recent meeting of influential businesses in south Essex, they were worried that a degree of gold-plating still goes on with regulation. We all accept that some regulation is needed, but please let us make it fair, even and easy to understand. They also express concern—I know that my right hon. Friend the Secretary of State for Work and Pensions has looked into this—about the scrapping of the default retirement age. They have used it, rightly or wrongly, to manage their work forces, and are concerned that raising it will create greater problems for them in the future and stop new openings being created in their organisations.

I also ask that we look at how we classify truly small businesses. This Budget uses the number 10, but businesses with 20 and perhaps even 50 employees are small businesses as well. They need a greater degree of support than the previous Government gave them and than we are currently proposing to give them.

Finally on the business side, we know that we need to grow our exports. We need to reach out and trade across the world. I heard the statistic recently that there are

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now 350 million people in India who describe themselves as middle class—people who have disposable income. We need to reach out and show them that British companies and products can address their needs and wants. However, we need to provide some security for those companies. I have a constituent who has been trading in north Africa. He is concerned about whether he will be paid for work that he has undertaken. He is a small business man. Perhaps we should consider how the Government can support businesses that are trading abroad in places where there is not total confidence and security that they will be paid. I welcome the support that we showed for science and technology, because it is companies with innovative and technology-based ideas that will drive growth in our economy.

Of course, I also welcome the help that was announced for families, such as the raising of the tax threshold, the council tax freeze and the 1p cut in fuel duty. Although that 1p on its own may not be significant, the scrapping of the 5p escalator is significant. It means that petrol will be 6p cheaper next month than it would have been under the previous Administration.

Above all, that tax cut and the other measures announced in the Budget demonstrate that this Government are willing to listen and to adapt to the changing landscape. I hope that we will continue to do that, and that we will continue to listen to our residents, individuals and companies, and work with them to create growth.

6.12 pm

Simon Danczuk (Rochdale) (Lab): I listened to the hon. Member for Burton (Andrew Griffiths) with interest. The Budget has not been as well received in my constituency of Rochdale as it clearly was in Burton. I am not sure whether that is to do with the amount of beer that is consumed in Burton compared with the amount that is consumed in Rochdale. However, like him, I will concentrate my comments about the Budget on my constituency.

One of my central concerns since the coalition announced its programme of spending cuts has been that we will end up with a jobless recovery. I suspect that that is exactly where we are going. I understand that the Conservatives are motivated by their ideological belief in small government. They cut Government spending and public sector jobs because they believe that it is the right thing to do. Once upon a time, the Liberal Democrats agreed with Labour. Before the general election, they led voters to believe that they were a party of the centre left. I know that that is hard to believe now. Page 13 of their manifesto stated:

“If spending is cut too soon, it would undermine the much-needed recovery and cost jobs.”

That is what is happening today.

The Budget provided the Chief Secretary to the Treasury and his colleagues with the chance to use their influence in the coalition Government to help constituencies such as Rochdale that suffer from chronic unemployment. Rochdale’s unemployment statistics make worrying reading. Currently, 8.6% of the town’s active population is claiming jobseeker’s allowance, with almost 15 claimants per vacancy at the jobcentre. No doubt the 4,000 unemployed people in my constituency were unimpressed to hear the Chancellor increase his unemployment forecasts. Those forecasts tell them not only that it will be a long time before they will have an opportunity to gain employment,

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but that more people will be joining them on the dole queue—and all because the Chancellor will not change his course.

Rochdale is heavily dependent on the public sector. We face £64 million of cuts from this Government’s Budget just in local government. That will force even more people in Rochdale on to jobseeker’s allowance. The Government have long argued that they will create the conditions for the private sector to sweep in and create the jobs that are needed. Let us look at the reality in Rochdale. In many respects, the Chancellor has only increased Rochdale’s disadvantages. The enterprise zone at Manchester airport will continue the worrying trend of investment being drawn away from Rochdale to other, often more prosperous, parts of Greater Manchester. The new enterprise zone will create a disadvantage to Kingsway business park in my constituency. What is more, the Centre for Cities report shows that every job created in an enterprise zone costs more than twice as much in real terms as a job created by the future jobs fund, and more than four times as much as a new deal job. The Chancellor has made much of his tax incentives to encourage businesses to create jobs. However, the research and development tax relief for small businesses will help less than 1% of those businesses.

In conclusion, we have learned nothing new about the Conservative party. We have known all along that it would prefer to give tax cuts to bankers than invest in the future jobs fund or in manufacturing. However, the Liberal Democrats once portrayed themselves as the defenders of places such as Rochdale. They should be ashamed of what they are party to. This Budget shows that they are unable to stick up for their ideas and for the people they purport to represent. It is no wonder that this weekend, yet another Liberal Democrat councillor in Rochdale announced that she would not renew her membership of that party.

6.17 pm

David Rutley (Macclesfield) (Con): I am grateful for the opportunity to speak in this important debate. Given the restrictions on time, I will focus on the Government’s plan to achieve long-term sustainable economic growth. I welcome their commitment to make that their biggest economic priority.

I welcome the Chancellor’s clear signal that Britain is open for business, and the steps that he has taken to revitalise the country’s enterprise culture. Reducing corporation tax by a further percentage point to just 23% in 2014 is another boost to business and will help to establish the UK again as a great place to do business. Like many Government Members, I welcome the Chancellor’s move to increase tax relief on new business investments to support our entrepreneurs and wealth creators. That will help to grow businesses across the country, including those in Rochdale. Yesterday’s StartUp Britain launch will encourage more people to create their own companies.

Businesses like what they see. It was good to hear from the Institute of Directors today that 70% of businesses surveyed believe that the Budget will have a positive impact on the economy. The incentives that I have mentioned are vital in recreating the enterprise culture. Many small businesses in Macclesfield tell me that they want the Government to break down the barriers that

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have built up progressively and which, collectively, block businesses from expanding. I therefore welcome the Government’s commitment to reduce the burdens on business by looking at planning, tackling excessive health and safety regulations, and, importantly, simplifying the tax system.

The Chancellor’s approach to deregulation, as set out in “The Plan for Growth”, is very pragmatic. It will support industry sectors that are critical for the economic growth that we need. Those industries rightly include advanced manufacturing, digital and creative industries, and life sciences and health care.

Macclesfield is home to one of AstraZeneca’s largest pharmaceutical manufacturing sites, so I was delighted to see that David Brennan, its chief executive, had given his support to Government plans and said:

“We welcome the package of measures announced by the Government…Those on clinical research and the environment for undertaking clinical trials represent a powerful statement of intent about the government’s determination to maintain the attractiveness of the UK as a centre for R&D activity.”

That is a ringing endorsement from one of our most important pharmaceutical companies. My request to the Chancellor is that he break down the barriers to business success with the same energy and pace that he has shown in so many other areas of economic policy. It is an urgent priority.

We can learn a lot from Macclesfield’s proud entrepreneurial tradition. The local economy was built on silk, and Macclesfield became the world’s largest producer of finished silk. Since that time there has been an entrepreneurial thread running through our economic development. Silk led to dyes, and dyes brought ICI to Macclesfield after the second world war. Today we benefit from AstraZeneca’s strength in pharmaceuticals, and that entrepreneurial tradition is still alive. We have higher than average business start-up and survival rates. We are proud of that tradition, but in the current challenging economic climate, no one is taking growth for granted.

One of the most rewarding parts of my job is being able to work with local businesses and community groups to make Macclesfield a stronger destination and to help boost the local economy. We have made big strides, and working with the support of Cheshire East council, we have created regular business breakfasts for Macclesfield’s businesses to have their say on the local economy. They wanted a clear action plan, so with their support we have created a Macclesfield economic forum, which will steer a course towards stronger economic growth. We are building on that momentum, and the proposals that have been put forward in this Budget will help us with that task.

It is often said that two “Eds” are better than one, but based on what we have heard from Opposition Front Benchers, it is clear that that is not always the case. [Interruption.] It took a while for some people to get that. It seems that the Opposition are suffering from a number of seemingly delusional conditions, which are getting progressively worse. It started with the credit crunch, when they had a bad case of what Lord Turnbull has called “wishful thinking”. They thought that they had put an end to boom and bust, but all too clearly, they had not.

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Then came a well-documented case of deficit denial. The Opposition blame the deficit on the economic crisis, but they are unable to face the fact that they ran cyclically adjusted deficits in each of the six years to 2007-08. Sadly, in more recent days, Opposition Front Benchers have started to exhibit signs of a new condition—alternative avoidance. The symptoms are there for all to see. They say they have an alternative and tell millions of people that they have one, but they are completely incapable of articulating what it is.

The Labour party has no alternative. In stark contrast, the Government have set out a positive plan to tackle the deficit and put the UK back on the path to sustainable long-term economic growth. I commend the Budget to the House.

6.23 pm

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I begin where I ended my speech a few weeks ago on Second Reading of the Welfare Reform Bill—by referring to the Government’s approach to disability living allowance. It is always helpful after a Budget to have a look at the Red Book, and on that subject, as on others, I have done so. I found that the Chancellor of the Exchequer states that the Government intend to recoup about £470 million during this Parliament as a result of removing the mobility component of DLA.

This debate gives us a wonderful opportunity to clarify a subject that has been discussed again and again, but which has led, even today, to sheer confusion. For some 80,000 disabled people, the planned removal of the mobility component of DLA from people living in residential homes is causing great concern, and the issue is clouded by the obfuscation that we have heard from the Government, including from the Secretary of State for Work and Pensions today.

Last week the Prime Minister claimed that the Government did not plan to remove the mobility component, even though again and again at the same Dispatch Box, the same Prime Minister had compared the people involved with patients who are in hospital for two or three weeks. Whatever the Government say—I hope we will get some clarity from them tonight—clause 83 of the Welfare Reform Bill, which is being discussed in Committee as we speak, will legislate precisely for the removal of that benefit. My hon. Friend the Member for Glasgow North East (Mr Bain) has pointed out to the House that 2,000 disabled children could lose out.

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller) indicated dissent .

Mr Clarke: I invite the Minister to intervene to tell us for the first time exactly what is going on. She has had every opportunity to do so. If she does not, the most vulnerable people will remain unimpressed by the Budget.

Maria Miller: I thank the right hon. Gentleman for allowing me to intervene. I point out to him that clause 83 of the Bill is about overlaps. He will have heard the Prime Minister make it very clear from the Dispatch Box that we do not intend to remove the mobility component of DLA from residents in care homes from 2012. We will, however, as he would expect, examine all DLA recipients as we move forward with the reform—with which, as we have heard from the Labour spokesman today, the Opposition agree.

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Mr Clarke: I heard the Prime Minister, and I have heard the hon. Lady on numerous occasions. I even had a private meeting with her, along with Lord Rix, who co-chairs with me the all-party group on learning disability. She has not once said that there will be a change to the money that the Red Book anticipates will be saved by the removal of the benefit, or that the Government are changing their mind. If the Minister who winds up tonight’s debate says that, there will be joy among thousands of disabled people and their carers, but it has not been said yet.

What we are being told is that the Government inherited a financial crisis. I consider the views of my constituents on that and other matters, but the fact is that they are bored stiff with the blame game. They know about the deficit, but they also know about growth. They know that the Government said precious little about growth in the Budget, as has also been the case today.

Take, for, example, fuel. I argued that the VAT increase should be reversed, but the Chancellor expects drivers to be grateful for a 1p cut in fuel tax when VAT is going up by 3p in the pound. That will not allow the Government to ingratiate themselves with people who can no longer afford to fill up their tanks on the forecourt. If Government Members have some doubt about that, may I refer them to, of all newspapers, yesterday’s Sun? It indicated that one fifth of people had given up driving. If that represents growth, I do not understand the meaning of the word.

A woman in my constituency, a nurse called Sandra, does a round trip of 80 miles a day to do her job. She fears for the future and, like me, regards the energy regulations in the Budget as being too little, too late.

Stephen Barclay (North East Cambridgeshire) (Con): The right hon. Gentleman says that the measures are too little, too late. Why did his party set a 10-year target in 2000 and then miss it in 2010, only to set in 2009 a far more ambitious target for 2020 that no one expects any Government to reach?

Mr Clarke: If I had another six minutes I would be very happy to answer the hon. Gentleman, but if he does not mind, I will just make my own speech.

There is profound disappointment with the influence of regulators, particularly in the energy sector, for gas, electricity, oil and the rest. We are seeing the impact of that influence in what people are actually paying day by day, and in the job losses being experienced as a result.

As I said, my constituents are well informed, as the House would expect them to be. Mrs Agnes Baillie, from the lovely little village of Auchinloch, who is 85, knows what the change in the pensions inflation link from retail prices index to consumer prices index means, even if the Secretary of State does not—he skipped over that in his speech. She knows that from 2011 that change will apply to state second pensions, public service pensions and some private occupational pensions, that RPI is not CPI, and that both the Conservatives and the Liberal Democrats gave firm pledges in their election manifestos that they would not change the existing arrangements—they certainly did not say that they would change things to the disadvantage of current and future pensioners.

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The Secretary of State scoffed at the mention of the banks, which is both astonishing and disagreeable. The banks’ behaviour is at the heart of the all the problems that we are dealing with, and we will not get the economy right if we do not address that; instead, we will get stagnation and lack of growth. Firms will be unable to get off the ground and young people will be unable to get on to the housing ladder if the banks are not challenged more profoundly than they have been so far.

The last words of the Chancellor’s Budget statement were:

“We have put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Is that at the expense of 80,000 people, including 2,000 disabled children who live in residential care homes? If so, it tells us a lot about this coalition Government and the values that they hold.

6.32 pm

Stephen Barclay (North East Cambridgeshire) (Con): First, further to a number of the speeches from Labour Members, including the hon. Members for Rochdale (Simon Danczuk) and for Birmingham, Erdington (Jack Dromey), who I am pleased to see are still in the Chamber, I shall first suggest that the difference between the parties is less than is claimed. Secondly, I shall highlight the fact that significant waste remains, and that waste cannot be cut too fast or too deeply. Thirdly, I shall highlight the disconnect between the House’s responsibility for setting a Budget and debating it, and the information available for effective scrutiny.

Is the gap between the parties as wide as Opposition Members claim? All parties would have spent beyond their means in this Parliament. The Office for Budget Responsibility says that under the coalition, national debt will be £1.31 trillion at the end of this Parliament. Had Labour remained in office, national debt would have been £1.38 trillion. A difference of £62 billion is not insignificant, but to put that in context, it is less than we will be spending in a year on debt interest by the end of the Parliament. It is therefore not credible to say, as a number of hon. Members have done, that public services will be put at risk. After all, the Government will spend £700 billion a year, which is 40% of gross domestic product—more, in fact, than Tony Blair was spending when he left office.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): Will the hon. Gentleman clarify that point? Does he not recognise that one crucial difference is the configuration of spending under Tony Blair? That spending went mainly on services, but under this Government, the money will be spent on massive unemployment.

Stephen Barclay: Had the hon. Gentleman bothered to be here for the whole debate he would have heard some of the points made by my colleagues, including the fact that £42 billion is being spent on debt interest this year alone.

The hon. Gentleman is quite right to ask where the money is going, which brings me to my second point: waste in spending. The focus is often on top salaries in the public sector, but in Cambridgeshire there is one station manager, or a more senior officer, for every four

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full-time firefighters, one police sergeant for every four constables, one inspector for every three sergeants, and one chief inspector or above for every inspector. There has been huge inflation in management costs.

Opposition Members may chunter, but let us look at what many of those managers do. The Ministry of Justice asked local authority youth offending teams to collect more than 3,000 bits of data on process, and yet outcomes were still not measured, so the YOTs still cannot say which prevention schemes work. There has been an inflation of management salaries, but often the same people are paid for the same performance. The chief fire officer of Cambridge earns £190,000—£60,000 more than the chief constable—and has three deputies on £150,000, £140,000 and £130,000 each. Perhaps Opposition Members were marching on Saturday to protect such salaries, but we need to look at productivity, and at what we get in return for those salaries and that inflation in management spend.

Jack Dromey: On productivity, the Prime Minister hailed local government as the most efficient part of the public sector. Can the hon. Gentleman square that with demanding up-front, front-loaded 28% cuts, the consequences of which are being felt in my constituency?

Stephen Barclay: The hon. Gentleman mentioned productivity, but I urge him to read what the independent National Audit Office says about the health service. Spending doubled, so of course waiting lists went down—we would expect that—but the NAO found that health productivity fell dramatically. The spending fell to many of the best-paid staff such as consultants, so productivity did not match funding.

On procurement waste, the NAO says that Firebuy, an arm’s length body set up by Labour, cost twice as much to set up and run as the savings that it made. On NHS procurement, the NAO found that

“NHS…trusts pay widely varying prices for the same items.”

One NHS trust bought 177 types of surgical gloves.

The huge waste in the opaque spending in local budgets needs to be addressed. For example, Cambridge fire service spends £1.77 million, an increase of £600,000, on what it defines as “other services and supplies”. It cannot explain what that spending is. Cambridgeshire police define £7 million of spending as “other”.

Kwasi Kwarteng: What was the cause of all that waste in the first place?

Stephen Barclay: I would attribute it to a number of factors. Let me give an example. I have mentioned local spending in Cambridgeshire, but a national organisation, Ofcom, is an arm’s length body run by a former adviser to Gordon Brown and Tony Blair. He was paid £1.5 million over the last four years, and he reduced his head-count but managed to increase his staff budget. Last year he spent £9.8 million on 180 different consultancy providers. Ofcom even managed to spend £200,000 on newspapers and magazines, but it has only 800 employees, which works out as more than one free newspaper a day for every member of staff. Seven Ofcom staff managed to claim in expenses more than the average wage, with one

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racking up £5,500 on taxis. I do not know whether they took taxis to the protest on Saturday, but that is the waste that we hear about.

My local police bought six Land Rover Freelander cars for senior officers at £28,000. Bobbies on the beat are far cheaper than the management tier, and I suspect that they make more arrests. We should look to protect front-line services, not to make cuts in them when there are other significant costs.

My final point is on the disconnect in terms of the information that the House has when it sets Budgets. I do not believe that we are effectively scrutinising what happens. In 2009-10 we spent £1.5 billion on consultants and £700 million on arm’s length bodies, without any central data being collected. So we know there is waste. Gershon, Green and many others have looked at the matter, and I welcome the steps taken by the Front-Bench team in setting up the Major Projects Association, even if at the moment it only has 38 members of staff. In 13 years in office, however, the Labour party did not even define what a major project was, which is why we have such wide variations in Government.

Despite all the differences in the headline figures and some of the scaremongering we have heard, I hope that we do not lose sight of how money is spent. We cannot cut waste too fast or too deeply. It is clear that there is waste in our system, and unless we have good-quality data with which to benchmark, standardise and give visibility to the problem, our debates will end up returning to the soundbites that we have heard too frequently over recent days.

6.40 pm

Emma Reynolds (Wolverhampton North East) (Lab): There seems to be agreement across the House that one of the main lessons of the global financial crisis is that we need to rebalance the economy. In my view, the major objective for the Budget should have been precisely that, because it is the only way to drive sustainable growth and job creation. There are two major ways to do that, and correspondingly two tests that I set the Budget. First, it should rebalance the economy away from an over-reliance on financial services, and secondly, it should reduce the regional economic disparities in our country.

On the first test, we should recognise that our country has a proud history of making things, and we remain the sixth-largest manufacturing country in the world. Manufacturing growth is currently outstripping growth in the service sector. In my constituency, which is part of the black country—once the beating heart of the industrial revolution—manufacturing still accounts for one fifth of jobs. The aerospace cluster in my constituency is thriving, although against a backdrop of a worrying overall rate of 8% unemployment. One company in that sector, Goodrich, is currently on a recruitment drive, creating 100 new jobs. At the end of his Budget speech, the Chancellor said that he wanted to give meaning to the words, “Made in Britain”, but if the Chancellor wants goods to be made in Britain, why did he slash capital allowances in his emergency Budget in June and use the £2.7 billion to deliver a cut in corporation tax, as set out on page 44 of the Red Book? This transfer will disproportionately benefit the banks at the expense of manufacturing. How is that consistent with the Chancellor’s desire to prioritise manufacturing?

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The tax reliefs that the Chancellor announced last week are a flimsy sticking plaster for the much deeper wound he left in June. In the words of the Institute for Fiscal Studies, the Chancellor is

“giving with one hand and taking away with many others”.

The same is true of the Government’s local enterprise partnerships, which they trumpet as an innovative scheme. I want to pay tribute to those businesses in the black country that have successfully formed an LEP, but again the Government have given a false prospectus to these businesses. They tell people to apply for the regional growth fund, but it is a tiny pot of money—one third of what was available for regional development agencies—and is said to be over-subscribed by 10 to one. The Government know that it will leave many more disappointed than successful among those who have applied.

The regional growth fund comes nowhere near filling the hole left by the very successful regional development agency, Advantage West Midlands, which was mentioned by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). Once again, the Government give with one hand, but take away with the other. I would like to think that the enterprise zones will in reality deliver what the Government claim they will deliver, but I am worried because even the Conservative Chairman of the Treasury Select Committee, the hon. Member for Chichester (Mr Tyrie), warned last week that they risk distorting activity and adding no new jobs. The risk is that they will simply incentivise existing businesses to move into a low-tax zone without employing more people. Britain needs job creation, not job relocation.

On the second test, there needs to be a rebalancing of economic wealth across our nation as a whole to reduce growing regional disparities. Globalisation has brought many opportunities to the UK, but all too often the communities in the midlands and the north have borne the brunt of the risks and insecurities of globalisation, while the rewards have tended to flow to London and the south-east. Unemployment in my constituency is 8%—double what it is in the south-east—and we are losing 300 jobs at New Cross hospital and 500 jobs at Wolverhampton city council. And this is just the tip of the iceberg. The Chancellor is taking a reckless gamble by expecting the private sector to pick up the pieces of his massive public sector cuts. He is driven by an ideological commitment to a smaller state. The Budget crucially fails to redress the growing economic disparity between the south-east and the rest of the UK. Areas such as the west midlands need more stimuli for the private sector than other areas. For example, the decisions about the regional growth fund need to prioritise areas hit hardest by the global financial crisis.

The Budget fails both my tests: of rebalancing the economy towards manufacturing, and of redressing growing regional disparities. We want to see more goods made in Britain, but the Chancellor’s actions do not match his rhetoric, and in fact run contrary to it. With growth down, unemployment rising, youth unemployment at a record high and consumer confidence sinking, households are seeing their living standards falling as prices outstrip wage increases. The Chancellor should have had the humility to realise that his cuts are too deep and too fast, and that his massive private sector gamble simply is not working. My constituents are bearing the brunt of his reckless Budget.

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6.46 pm

David Mowat (Warrington South) (Con): We have heard a lot this afternoon about the serious deficit left to this Government, but there is another aspect of the economic legacy referred to by the hon. Member for Wolverhampton North East (Emma Reynolds): the incredible imbalance in our economy between London and the regions in the north, Wales and the midlands. At the tail end of the previous Government, gross value added in London per head was accelerating away from the rest of the country and now is approximately double what it is elsewhere. That is an awful statistic. In no other country in the world does the capital city dominate the economy to that extent. It is not a natural situation. It does not happen in France, Germany, Holland or anywhere else, but it happens here.

I disagree with the hon. Lady. I think that the Budget has started to deal with the legacy left to the Government. One thing that the Budget has to do is tackle the problem I have outlined, and I am delighted to say that we have started to do that. The Budget has developed 21 regional development areas, one of which I hope will end up in Warrington. One policy developed before the Budget was the national insurance holiday for start-ups in the regions, and I was genuinely disappointed that Labour Members voted against it, in favour of a different proposal that, by the way, would have simply put more money into London. We have to address the imbalance, and that is what we will do. The Budget has started to do it already.

There are three other areas in which we have to make progress. We have not talked during this debate about energy policy. Energy is a regional issue. One unit of GDP growth in the regions is more reliant on energy than it is in London and the south, because in the regions we manufacture, whereas London and the south tend to be more financial-services oriented. Energy prices matter, but I am concerned that we are sleepwalking into becoming a high-energy economy. I support the announcement of a carbon floor price in the Budget. It is right to have that stability, because we have to invest in power stations, but I am concerned about the haemorrhaging of money that is costing industry a great deal. I am talking about some of the renewables investment we are having to make.

Thanet wind farm was a stunning technical achievement, but it requires a subsidy of £1 billion over its lifetime. We cannot just keep doing that. If we are going to meet our climate change commitments by moving industries from the north of England and the midlands to India and China, it will not be a great success.

The other aspect of economic policy that matters to regional rebalancing is infrastructure, which generates jobs and transfers wealth between locations. I make no apology for heavily supporting High Speed 2. The economic case and business case for it are strong, and I hope that we make progress on it quickly. KPMG has estimated that High Speed 2 on its own will bring 40,000 further jobs to the north and to Yorkshire. Those are jobs that we need very much. I understand if Members on both sides of the House—and certainly Government Members —are sceptical about aspects of that or if they question the business case. If the business case needs to be questioned, it is right that we should do so; I just note in passing that the business case for neither High Speed 1 nor Crossrail was questioned in the same way.

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My final point about building regional strength involves skills. I was pleased that the Budget had more money for science—and in particular more money for Daresbury, although I will be churlish and say that I was disappointed that Harwell got more. I am also delighted that we continue to make progress on apprenticeships. However, that is not enough by itself: we have to build a technology-based economy. That will be the only way in the future. A shocking statistic is that, despite increasing the number of graduates by a factor of five over the past 25 years, we now have fewer people studying engineering at university than we did 30 years ago. That is not how we will build technology-facing companies such as Microsoft, Apple, Dell and Yahoo!, which did not exist 15 years ago and which, had they been in this country, would frankly have wiped out all our unemployment in one go.

I disagree with the hon. Member for Wolverhampton North East. The Budget has made a start to fixing the appalling legacy of the misbalanced economy that we have been left. It is a long, hard road, but we have to start somewhere.

6.52 pm

Ian Lavery (Wansbeck) (Lab): Many of the people affected by last week’s Budget were in attendance in Hyde park on Saturday. Some 500,000, I believe, were there, marching against the Government’s cuts. It was a privilege and an honour to stand shoulder to shoulder, along with many Labour colleagues, with so many people in the UK—nurses, doctors, teachers, policemen, prison officers, council workers and trade unionists, among many others, including many people representing local charities, community groups or professional organisations. It was an absolute credit to the TUC and Brendan Barber that they organised such an historic event. Those 500,000 people gave a clear message to the Con-Dems about last week’s Budget and the cuts agenda, which is going too far, too fast. The Budget again hit the less well-off, not the more affluent people in this country—not the millionaires on the Government Benches.

I want to focus on two issues. The first is the Chancellor’s announcement last week about the carbon tax—or the carbon floor price. It could have a devastating impact on Rio Tinto Alcan, which is the biggest private sector employer in my constituency; in fact, it is the largest in Northumberland, employing 600 people and probably serving more than 1,000 people indirectly in the community. Alcan has put £100 million into the local economy, which is something that we greatly need. However, last week’s introduction of the carbon floor price, in addition to the EU’s emissions trading scheme, means that nearly a third of Alcan’s running costs are due to legislation. It simply cannot sustain that. I am concerned that if we do not look at that, Alcan—a huge employer—might consider closing the plant. The Budget announcement certainly threatens the progress of what has been a tremendous employer. I would ask the Government to rethink their policy on the carbon floor price; and if possible, I would like to discuss that with the Ministers concerned.

Last week’s forecast showed that growth figures had been cut, with inflation up, borrowing up, unemployment up and youth unemployment up to record levels. Again, that is extremely concerning. They say that the devil is

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in the detail. I would refer to the Deputy Prime Minister, who has established a record in betraying the young people of our country. Perhaps he should have read the Red Book, as probably we all did. If he does, he will realise that the coalition Government did not announce from the Dispatch Box last week that they were reducing winter fuel payments to pensioners. It is an absolute disgrace that no one had the guts to stand at that Dispatch Box to tell the House and explain to the country that the Government were reducing winter fuel payments to people aged between 70 and 80. That is another broken pledge—another broken promise—from a broken man who is completely out of his depth.

Steve Webb: Will the hon. Gentleman give way?

Ian Lavery: No.

Quite frankly, the Deputy Prime Minister is controlled like a sycophant—a political Buzz Lightyear—by the very hands of the Prime Minister himself.

The other issue is the significant changes to the Health and Safety Executive and the Lord Young review—which was implemented last week in the detail of the Budget—which will cause huge problems for workplace inspections across the country. That is a great concern, because many people are still being killed in the UK or contracting illnesses or diseases as a result of working in industry. Again, I would like that reviewed. We should be proud of our health and safety culture—Opposition Members certainly are, but I am not so sure about Government Members.

Last week’s Budget did nothing for the hard-working people of this country—some people describe them as the squeezed middle. There has been an attack on pensions, pay and conditions, rights in the workplace and health and safety. No wonder 500,000 marched so proudly against the cuts and the Budget on Saturday. The coalition Government would do well to listen to those people, rather than the inane ramblings of Batty Boris, the Mayor of London.

6.58 pm

Mr Tobias Ellwood (Bournemouth East) (Con): It is a pleasure to participate in this debate, and I am pleased to see so many hon. Members who also want to participate. I have done my best to speak in other Budget debates, and I am under no illusions that this speech will be read or listened to any more than my previous contributions.

This year’s debate has a different atmosphere from previous years. In 2007 and 2008, there was a sense of denial. In 2009, there was a period of inertia as we waited for whoever was going to win the general election—either Labour or Conservative—to grasp the nettle and make the decisions that the country needed. Finally, in 2010, we saw the launch of the long overdue plan. It is only this year, 2011, that we are really experiencing that pain, which has been debated at length today and in the past four days.

The state of the economy clearly dominates our lives. It is complex: like the cockpit of a 747, there are many buttons, switches and levers. Knowing when to pull a lever and for how long affects the overall performance, the direction of travel and the comfort—or, indeed, the displeasure—of the passengers, who rely on a duty of care. There are four principal levers that we have for the economy: fiscal policy, which determines the management

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of our deficit and our debt; monetary policy and interest rates, which are now set independently; the regulation of the financial sector and the relationship between the Bank of England, the Treasury, and the financial and business sectors; and finally, micro-economic policies—how we approach education, how to get a competitive tax system, and so on. We need to decide how to use all those levers at this delicate time, as we try to mend the economy. We can be dedicated and vigilant pilots, but we will have our work cut out if we are handed a machine that has been battered and bruised by the previous owner. It is exactly the same with the economy.

We have had five days of debate on the provisions in the Red Book. I will not go into the details of all the issues that have been raised. At the weekend, as I was thinking about what to say in my speech today, I watched the rally that was taking place in Hyde park. I saw all the banners; it was like a summer camp for the unions, like a revival for them as they all called for more money for their own area. They wanted more money for pensioners, for health, for education and so on, but no one said where the money was going to come from or how it was going to be generated, and we have heard no such explanation from Opposition Front Benchers today.

The rally said a lot about Labour, in that the Leader of the Opposition is now firmly embedding himself with the unions. Incidentally, I think he was unwise to make comparisons with previous struggles, such as those of the suffragettes or the US civil rights movement, or with the fight against apartheid. It would also have been nice to hear a bit of mea culpa, a bit of recognition that Labour was partly to blame for what is going on.

Frank Dobson (Holborn and St Pancras) (Lab): Does the hon. Gentleman accept that the issues to which the Leader of the Opposition referred all had one thing in common with the rally on Saturday—namely, that no Tories took part in any of them?

Mr Ellwood: I did not receive my invitation. Perhaps I shall find it in my office when I go back there.

The bottom line is that we inherited an economic nightmare—the worst of the messes in the G20. The gap between the richest and the poorest had grown since Labour came to office, and the size of government had bloomed. In the past decade, the civil service had grown by an additional 800,000 people. I have no idea what those people actually did, but they were in addition to those who were running the country a decade earlier. That is the bloated government that we need to try to get rid of. There was also a culture of encouraging people not to work. It was never easier than under Labour to do nothing and get paid for it. Those are the kinds of issues that we need to tackle.

The number of regulations introduced under Labour was astonishing. We are now faced with about 21,000 regulations, of which about 10,000 were created by the last Government. As I said earlier, Labour was planning huge cuts, had it won the election; it just did not say where they were going to be made. Had it won, it would have received a lot of the grief that we are receiving today, because it would have had to implement very much the same measures that we are implementing.