4.27 pm

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): For one hour, I listened very closely to the Chancellor of the Exchequer—during the past few hours, I have had a chance to look through the Red Book to check that I did not miss anything—and I desperately waited for any acknowledgment that millions of people up and down our country are really struggling to get by.

Despite the Chancellor not wanting to hear it and Government Members laughing at my right hon. Friend the Leader of the Opposition when he suggested it, there is a cost of living crisis. We know that working people are £1,600 a year worse off under this Government. Real average earnings are more than £1,600 a year lower today than in May 2010. Prices are going up faster than wages, and the OBR has confirmed that people will be worse off in 2015 than they were in 2010.

Not a week goes by when, at my surgery or on the doorstep, I do not meet a constituent who is really finding it tough. As my hon. Friends have said, such

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constituents have to make very real choices about having a hot bath or putting food on the table, with mums having to decide whether to go without food in order to feed their kids. A constituent at my surgery last week said that he was reduced to brushing his teeth with salt water and growing a beard because he could not afford toothpaste or razors; not very long ago, he did not have such challenges. Every week, numerous constituents come to my surgery because they cannot pay utility bills and have no answers for the people who come knocking on their door, which is the reality for too many people.

My local food bank will be celebrating—if we can call it a celebration, which it is not—its third year in a few weeks’ time. The number of people in my constituency who have to access emergency food aid has gone up from 2,126 in 2011 to 8,600 in this financial year, and that is not even the final figure. Nationally, more than 500,000 people are having to access emergency food aid, and that is a very conservative estimate.

I raised that point at Prime Minister’s questions the other week after I visited Ilkeston. I raised the case of a young person I met who was called Billy. Billy had been in employment since he left school, but was made redundant at the age of 23. He was making 70 job applications a month on average and could not feed himself. I learned the term “skipping”, which I had not heard before, and raised it at PMQs. Skipping is when people wait for supermarkets to throw food out at the end of the day in order to feed themselves, because they cannot afford to buy food. People wait to forage in the bins of Iceland to feed themselves and their families. The fact that people cannot afford to feed themselves in the seventh richest nation in the world is a national disgrace. I am ashamed that we have a Government who will not acknowledge the impact of their policies, such as people having to turn to food banks.

It is not just families and pensioners on low incomes who are being affected. I held a “what women want” session the other week to celebrate international women’s day. I had a discussion with mums from all different backgrounds at one of my local children’s centres. One of them told me that although both her and her husband have what she described as good jobs—management jobs—they can no longer afford a holiday. Every month, they struggle to make ends meet. That experience was repeated by many people during the discussion. Where is the help for the millions of people on middle and lower incomes who are not feeling any recovery at all? Those people are angry that the Government have given a £3 billion tax cut to people earning more than £150,000, while they and everyone else are worse off.

In the same discussion with women, another concern that was raised was the cost of child care. I echo the concerns raised by my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier). Many of the women said that the cost of child care was making the move into work impossible. The Chancellor’s announcement today does nothing for parents who are suffering eye-watering increases in the cost of nursery places, which has gone up by 30% since 2010. That is compounded by the fact that there are 35,000 fewer child care places. That is unsurprising from a Government

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who will have taken £15 billion out of support for children by the next election. Parents need support with child care now.

Ian Swales: Will the hon. Lady give way?

Luciana Berger: I will.

Mr David Lammy (Tottenham) (Lab): That is generous.

Ian Swales: I am listening carefully to what the hon. Lady is saying about child care. I wonder whether she is going to mention the 85% of child care costs that will be paid for people who are on universal credit.

Luciana Berger: Oh, goodness! As my right hon. Friend the Member for Tottenham (Mr Lammy) said, I was very generous in giving way. I come back to the point that one in three councils do not have enough places to deliver the Government’s promised child care for disadvantaged two-year-olds. Today’s announcement will not come into effect until next year. I reiterate that parents need help now, because child care costs are putting parents off going back into work. I am very disappointed as a result of what we did not hear from the Chancellor today.

I listened closely to the Chancellor’s announcements on energy bills, but the best deal in a broken market is not a good deal. Energy bills have gone up by about £300 since 2010. As I said before, my constituents are facing the choice between heating their homes and eating. The Liverpool Echo, my local newspaper, carried out a special investigation last week that highlighted the experience of Merseyside pensioners, who are being plunged into fuel poverty by rocketing energy bills. Under the Government’s new definition of fuel poverty, my constituency is among the top three in the country for that challenge. Where was the help for those people with their energy bills in the Chancellor’s Budget? There was none.

We need proper reform of the energy market. We need to freeze bills so that we can do what needs to be done to ensure that we know the cost of the energy that is generated by the six companies that generate 70% of the energy in the UK. At the moment, we have no idea of the true cost of that energy. We need to create a transparent pool, so that we are all fully aware of what the companies are generating and the cost of that energy. We also need a regulator with teeth, which we do not have at the moment. There needs to be a means by which people can properly compare and contrast prices, as they can for mobile phone bills. That is not possible at the moment because we do not have single standing charges and unit prices that can be compared. Again, there was nothing from the Chancellor to help not only households and individuals but businesses that are struggling to pay their energy bills.

On the day of the Budget, we have also heard the unemployment figures. The hon. Member for Dover (Charlie Elphicke) just talked about the statistics, but when we talk about long-term youth unemployment, we are talking about young people in my constituency who do not have employment, which will have long-term effects—[Interruption.] The hon. Gentleman gesticulates that the number has come down. In my constituency, the number of long-term unemployed young people—those who have been out of work for more than a year—has gone up by more than 60% since 2010. That is a waste of

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the talent of our young people and has long-term implications not only for them but for the wider economy. The young people who are not employed at the moment bring a cost to our economy of £3.2 billion over their lifetime. In my constituency, 835 young people are out of work, and I wanted more from the Chancellor to address that situation properly. We know that the current schemes are not working, and that less than 20% of young people locally are getting into work. We need to do everything we can.

Charlie Elphicke: Will the hon. Lady give way?

Luciana Berger: I will not, because I have less than a minute left.

Labour’s policy is to provide a jobs guarantee by repeating the bankers’ bonus tax. I listened to the Chancellor to hear whether he might do that, but there was nothing on that front, even though Barclays alone has increased bankers’ bonuses by 10% to more than £2.5 billion. Would not some of that money be well invested in the young people of our country, to ensure that they are in work and have a chance throughout their lifetime? We need to get the long-term unemployed, including the young long-term unemployed, off benefits and back into work. A jobs guarantee through repeating the bankers’ bonus tax would have achieved just that.

My constituents will be dismayed by the Chancellor’s Budget. I am sad that he could not find it in himself to acknowledge the cost of living crisis that millions of people are experiencing every day, including in my constituency. The Government are so out of touch, and today’s Budget has reinforced that.

4.37 pm

Alun Cairns (Vale of Glamorgan) (Con): I would like to say that it is a pleasure to follow the hon. Member for Liverpool, Wavertree (Luciana Berger), but I do not recognise the biased and party political points that she made. Her speech was loaded against the positive news, which should be welcomed, about measures to help people in her constituency and others who need the Government’s help and support. I hate to think of the contributions that she and many other Opposition Members would have made if we had not been able to look forward optimistically to the sustainable growth that the Government have helped craft through their difficult decisions over recent years.

As we look optimistically at that growth, it is hard to believe the predictions that the Opposition have presented to us over recent years. We all remember the “too far, too fast” line, and then there was “flatlining”. We then had predictions about a double dip and even a triple dip; then they predicted that there would be a million jobs lost. That shows the Opposition’s lack of credibility, following their previous prediction about having ended boom and bust. They simply have no economic credibility, so their criticisms of an important building block in delivering sustainable economic recovery and growth show them for what they really are.

Of course the growth is welcome, but I am also extremely impressed by the nature of the recovery. Deficit reduction is important in itself—after all, it is the fundamental building block in creating confidence. The deficit has already been reduced by a third, and the

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Office for Budget Responsibility predicts that it will have been reduced by half by later this year. Of course, that in itself will not deliver sustainable economic growth, so we need to examine the data that are available beneath the deficit reduction figures.

The growth that we are experiencing is quite remarkable, and, again, it undermines the arguments that Opposition Members have made in recent years, and particularly today. The UK is now the fastest growing major economy in the world, and the fastest growing of the OECD nations. Even more than that, all sectors of the economy grew last year. We have to go back to 2007 to find the last time that happened, which demonstrates the balance of the economic recovery we are experiencing, be it in services, construction or manufacturing. Those are important sectors that demonstrate how growth in the economy is serving all parts and sectors of the UK, including those who are employed and those who seek employment. We are all sharing in the success.

All those who spoke from the Opposition Benches mentioned inequality and tried to highlight the differences between those who have and those who have not. However, they missed a really important line from data provided by the OBR and the Office for National Statistics, which is that we now have the least inequality in the United Kingdom for 28 years. That completely exposes all the anecdotal and selective evidence that has been presented. We have the lowest rate of inequality for 28 years, which is something Labour Members should be glad about.

If we examine the data further, we realise that the unemployment figures presented today were remarkable. Unemployment stands at 7.2% across the United Kingdom. It is unheard of for the rate of unemployment in Wales to be lower than the national average. In all my life I cannot remember unemployment in Wales being lower than across the rest of the United Kingdom, yet it now stands at 6.7%, so the gap between unemployment in Wales—my nation—and the rest of the United Kingdom is not just 0.1% as it was last month. I am absolutely delighted, and I hope that Labour Members from the Principality will join me in welcoming that success. It demonstrates that growth is serving every nation of the United Kingdom, and every sector in our country.

If we look at growth figures from the north-west, Wales or anywhere over the past two years, we see that all regions and nations of the United Kingdom have experienced levels of growth. Again, that shows that growth is not dependent on the dominance of London and the south-east, as was the case during the 13 years of the Labour Government.

Geraint Davies: As has been said, Wales has the highest level of poverty in the UK, with more in-work poverty than out-of-work poverty, and it is the most affected by the horrendous bedroom tax. The Tories are putting the boot into Wales, which is why we will kick the hon. Gentleman and the Government out next time.

Alun Cairns: I am grateful to the hon. Gentleman for making such an important point about poverty in Wales, because it needs to be recognised. However, even in the darkest, most difficult days, when coal mines and steel plants were being closed and things were extremely difficult for those communities, Wales was not the poorest part of the United Kingdom. After 13 years of Labour

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control, Wales is sadly the poorest part of the United Kingdom, but it is now experiencing higher and faster growth than most other parts of the UK. That goes to show that the UK Government are playing their full part in our turning the corner and getting out of the cul-de-sac that the Labour party left us in. That was what Labour left us.

We talk about balance across the economy, but more needs to be done to strike that balance in every way, and the Budget has taken a significant step in that direction. There has been significant support for manufacturing, including a £7 billion package that provides elements for capping the carbon price support scheme. One benefit of that £7 billion will be the £50,000 cut in energy prices or costs for a mid-size manufacturing plant. There are hundreds of those in Wales, including several in my constituency, and as a result of the Budget they will get a £50,000 cut in energy costs.

Mark Field (Cities of London and Westminster) (Con): Does my hon. Friend also recognise today’s important initiative in relation to export credit guarantees, which will encourage particularly small and medium-sized enterprises looking to export beyond the shores of the United Kingdom? That will make a significant difference in the high-resolution manufacturing industry, which is so well catered for in the part of the UK he represents.

Alun Cairns: I am grateful to my hon. Friend for underlining that point. I was going to come on to it, but his intervention presents me with an opportunity to highlight again the balance that the Chancellor is determined to restore to the economy to ensure that every part of the country and every sector within every part of the country is playing a part in promoting the economic growth and is sharing in and generating the prosperity.

The other point I wanted to make on energy related to the support for the energy-intensive industries. Dow Corning in my constituency exports 90% of its output. It is a true success story in the Vale of Glamorgan. The high energy prices really did raise some serious questions for the management of the organisation, but this support will be welcomed far and wide within the group and particularly in Barry, where it is the largest employer.

We need to acknowledge that as this recovery has been built, some people have had to pay quite a significant price, including savers, many of whom are pensioners. Of course, low interest rates were essential to deliver the economic growth we all need and on which public services are built. I am particularly pleased that the Chancellor has recognised that it is time for the growth to be shared with our savers and pensioners. Today’s announcements on encouraging saving, and especially the pensioner bond, is significant. A 2.8% return predicted for one year and a 4% return for three years is really quite important for people who want to be able to plan their future and for those who have done the right thing in that they have worked hard and saved hard.

The changes to the ISA are extremely important and very welcome. They will simplify the process, again providing certainty and security: if people work hard, save hard and do the right thing, this Government are on their side.

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Finally, I just want to say this: “If you’re a pensioner or about to retire, there is significant help; if you’re employed, the tax allowance will make a big difference; if you’re a saver, there is extra support; if you want to export, there is help available; and if you’re involved in manufacturing, there are significant energy cost reductions.” This is a Chancellor who is building sustainable economic growth as part of our long-term economic plan.

4.47 pm

Diana Johnson (Kingston upon Hull North) (Lab): Following on from the comments of the hon. Member for Vale of Glamorgan (Alun Cairns), may I gently remind him that we have had three wasted years before the recovery kicked in? I am sorry if he thinks that is a partisan or a party political point, but it is factually correct. The majority of my constituents in Hull North are certainly not feeling better off under this recovery, and I think the Budget will do very little to make them feel that things are going to get better for them and their families.

Few people in Hull will be taken in by the Tories rebranding themselves as the “workers’ party.” Some changes, such as the cut to bingo tax, are very welcome after some of the shambolic proposals we had in previous Budgets, like the caravan tax and the pasty tax in the infamous omnishambles Budget.

I listened very carefully to what the Chancellor said about building a resilient economy and delivering security for people in this country. Hull and the Humber should be at the forefront of fighting many of the challenges facing this country, such as climate change, generating green energy and developing the science of flood prevention. I believe we could turn issues that are seen as problems and costs into a positive opportunity for growth in the economy, but looking at this Budget in relation to Hull and the Humber, my constituents will be asking the following questions. Does this Budget help the real wealth creators and invest in the modern public services an efficient, growing economy needs? Does it help, for example, the part-time women workers I recently met in a Tesco in Hull who told me about the problems they were having in getting extra hours to make ends meet and pay their bills?

Hull has the 19th highest unemployment level in the country. Will this Budget help the 4,265 people still out of work in Hull North, according to today’s figures? Will it do anything for the long-term young unemployed in particular? Will it deal with the problem of those not in education, employment or training? It will not do any of those things. As the TUC said today, this is a

“short-term Budget…to shrink the state and help the rich.”

Thanks to the coalition’s confusion over energy policy, we are still awaiting good news from Siemens. If Siemens does not come to Hull, the jobs building wind turbines will in effect be exported out of the UK. Climate change deniers in UKIP might welcome that, but it would be a disaster for the economic regeneration of my city. The Budget also failed to announce rail electrification to Hull, but I hope that the Government will have some good news for us shortly.

We heard in the autumn statement that London is to get two new tube stations and a garden bridge, and there is talk of rebuilding Euston station. However, some bright civil servant thought it a good idea, when

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announcing the electrification of the trans-Pennine route, to stop in Selby, 20 miles short of the end of the line, which is Hull. Yet again, the people of Hull have said, “If the Government aren’t going to help us, we will help ourselves.” A proposal has been put together to bring in private sector money to electrify the line. If the Government put in some £2 million of public money, it will unlock approximately £96 million of private investment. I hope they will make that announcement shortly, and certainly in time for 2017, when Hull will be the city of culture.

Ian Mearns (Gateshead) (Lab): My hon. Friend is highlighting a very important point about Government investment in electrification programmes in the north of England. I recently attended a meeting of the all-party group on rail in the north, and the map of the investment programme we were looking at had a line heading north-east that said “York”, and then an arrow saying “to Scotland”. The north-east of England was not mentioned at all.

Diana Johnson: My hon. Friend makes his point very well. If the Government are serious about rebalancing the economy, they need to invest in northern rail.

It is interesting to note that, because of recent events, the coalition has now realised that flooding is a major economic problem. Perhaps that had something to do with the fact that the Thames valley was affected and the playing fields of Eton were flooded. I am pleased that the Chancellor announced additional money for flood defence work, but of course that should be seen in the context of the Government’s slashing the flood defence budget in previous years. As those in any area that has been flooded know, spending £1 on flood defences saves £8 in the cost of clearing up after a flood, so such investment makes sense.

On flood insurance, I note that the Chancellor is extending the Help to Buy scheme. Advertisements encouraging people to buy are plastered everywhere in places like Kingswood, in Hull North. However, it is a shame that other parts of the Government do not seem to think that houses should be built in areas like Kingswood, because they will not be able to participate in the flood insurance scheme that the Government have negotiated with the insurance industry. I should also point out that the new garden city at Ebbsfleet will be in a flood-risk area, and the owners of the houses built there will not get flood insurance under the Government’s scheme. It seems that one part of the Government does not know what the other part is doing. Small businesses are guaranteed access to flood insurance under the Government’s current scheme, but they will be excluded from the new scheme. The Government need to look at that problem.

On the cost of living crisis, which many people in my constituency face, there has been much fanfare about raising the personal allowance, but we know that 5 million of the poorest workers gain nothing from that increase. Many of those will be women. We know that the Government wanted to give the 8,000 millionaires their £40,000 windfall from the cut in the 50p rate of tax, but it is interesting to note who is bearing the brunt of the coalition’s austerity. The majority of those now falling into poverty and ending up at food banks are actually in work. That shows that the Government are not making work pay: being in work is no longer a guarantee of

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escaping poverty. FareShare in Hull said this week that demand for its help is up 53%, and the Trussell Trust reported a trebling of food bank use in a year.

The Economic Secretary to the Treasury (Nicky Morgan): Does the hon. Lady accept that with the increase in the personal allowance announced today, particularly from next April, 3.2 million people will be taken out of income tax completely, 56% of whom will be women?

Diana Johnson: I do not think the Minister was listening to what I said: 5 million workers earn much less than the personal allowance, so they are not affected by the increase. The analysis that has been done shows that the better off benefit far more from that increase. It is not a way of targeting the poorest in our society.

We are seeing the shocking growth of charity dependency in 21st-century Britain, which, as many hon. Members have said, is the seventh-richest nation. That is Dickensian in a digital age. It is tragic for the life chances of millions of people that after the coalition inherited an economy that had returned to growth in 2010, we have had three years of flatlining. Places such as Hull and the north have suffered the most from, for example, the savage cuts to council funding, despite the coalition Government’s rhetoric about rebalancing the economy.

Geraint Davies: Does my hon. Friend agree that the raising of the tax allowance, which will cost £1.4 billion to begin with and rise to £1.8 billion, compared with the bedroom tax, which will save about £500 million, shows us everything we need to know about the Government’s priorities? They are giving three times as much to people who have got some money, and the very poorest are being crushed.

Diana Johnson: My hon. Friend makes that point well. There have been 24 tax changes under the Government, and average families will be £1,600 worse off at the end of the Parliament. The recovery is too much based on the south, financial services, private consumer debt and an unsustainable property bubble. More women are now in work than ever before but many of them are in part-time work, on zero-hour contracts or on short-term contracts.

The poorest people in the most deprived areas have been hit hardest by the coalition Government. We have a bedroom tax, but we have no mansion tax. We have bank bonuses for some, but we have food banks for many. The new £1 coin neatly sums up Lib Dem involvement in the coalition. It is not the 12 sides that we need to worry about; it is the two faces. This is another Bullingdon Budget from a coalition of two parties representing one privileged class and creating two nations.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. The enthusiasm for interventions has meant that most Members have spoken for considerably in excess of the eight minutes allotted. Therefore, I have to reduce the time limit to seven minutes.

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4.58 pm

James Duddridge (Rochford and Southend East) (Con): I will not break with tradition and agree with everything that thehon. Member for Kingston upon Hull North (Diana Johnson) has said, but I wish her well with getting the Siemens plant. I saw some Siemens wind farms onshore in Morocco in the western Sahara recently, and they are very effective.

Reflecting on the hon. Lady’s quip about our coalition partners, which was somewhat unfair but slightly amusing, I noticed that the Chancellor is announcing a competition to determine what will be on the tails side of the coin. Heads you win; tails you lose, and I hope that at the general election, the Opposition will lose. Perhaps it would be appropriate to commemorate a failed Labour politician on the coin.

The hon. Lady talked about unemployment. I have looked forward, particularly during the past year and a half, to receiving the excellent House of Commons Library brief on unemployment by constituency, which is rich in information on what is happening. Time and again over the past 12 months, the unemployment rate in my constituency has fallen significantly.

I was pleased to hear that the number of 16 to 24-year-olds who are not in education, employment or training—NEETs—had declined to its lowest level UK-wide since 2008. I appreciate, however, that there are unacceptable differences across the country and that some constituencies have yet to feel the benefit. I am sure we all hope that it will be felt in the near future. The extension of the apprenticeship grant for employers to 2015-16 will certainly help, not only in places such as Prospects college in my constituency but in other constituencies where the unemployment situation is even more acute.

The people of Rochford and Southend East will be delighted by this Budget. It will mean more money in the pockets of hard-working people, homeowners and motorists. As the Chancellor put it, it is a Budget for the makers, the doers and particularly the savers. I will focus on the savings element of the Budget later. From an Essex perspective, people in my constituency will be pleased to hear that fuel duty has been frozen once again, providing a saving of 20%, given the rise that would have taken place had it not been blocked. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on campaigning for that change, and I commend the Chancellor for implementing it.

There was also good news on bingo. We did not get the 15% tax cut that had been requested, but one of 10%. The good people at the Mecca bingo hall in the Victoria ward in Southend might now invite me back. They told me last time that I would not really be welcomed back—[Hon. Members: “Aah!] Yes, I was somewhat surprised, but they were kind to me and said that they had voted for me. However, they made the mistake of allowing me to be the bingo caller, and I got it all wrong. I did not know my fat ladies from my two little ducks, or whatever it is. They told me: “Stick to the day job. Stick to politics.” I will do that, but I might go back and play bingo with them to celebrate the tax cut.

Thanks to this Government and to the Chancellor’s resilience, we will be able to keep interest rates low. This is critical; not enough has been said about interest rates, but they form the backdrop to the economy. The income tax personal allowance is to be increased again, to £10,500. This will really help working families and, in

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particular, it will help women who have had children to get back into work, perhaps working part time. It is crucial that they should be able to do that relatively early, to maintain a good employment history.

As a cider drinker and a beer drinker—not at the same time—I very much appreciate the Chancellor’s 1p cut in duty. It is a small amount, but it is a nod in the right direction. Based on the average price of a pint in a pub or a club, it means that for every 200 pints hon. Members drink, they will effectively get one free. It is a step in the right direction, and I think a few people in the House and in our constituencies will have a drink to say thanks to the Chancellor of the Exchequer tonight.

The export package is fantastic. It will help companies such as Ipeco, which makes the pilots’ seats for every single Boeing. Hon. Members will not be surprised to hear that it is based in my constituency. The package will also help KeyMed, a big medical supplier in Southend that employs more than 600 people.

Using the LIBOR fine for charities and good works is really nifty, in that it focuses on what we should be focusing on. Most people will not even know what LIBOR stands for—why should they?—but when excesses in the City are identified, they should be punished. It is great that the LIBOR fine will be paid to charities and to organisations such as the Royal National Lifeboat Institution, which operates on the foreshore in Southend as well as at the end of the longest pleasure pier in the world. The scouting movement will also receive some of that money, which is to be welcomed.

The companies around London Southend airport will welcome the Budget, and I look forward to reviewing it with them in the next few weeks when the Secretary of State for Transport comes to launch the new, improved terminal. The change to air passenger duty for flights to the Caribbean has long been called for and an inequity has now been resolved. Hats off to the Chancellor for finally sorting that one out.

The Chancellor talked of the city deal, from which Southend has benefited. On savers, it is wonderful that we are now able to trust people on annuities. The ISA merger is superb as it will allow people to save more and to move from equities to cash in later life, not just with new ISAs, but with the old ones. I noticed that on the Treasury website it is referred to as NISA rather than ISA. I hope we are not trying to rebrand for the sake of it, as natty as NISA sounds. The savings tax for people on low incomes, taking them out at £5,000 is excellent. Overall, there is something for everyone in this Budget and I am sure the good people of Rochford and Southend East will be very happy with it.

5.5 pm

Ms Margaret Ritchie (South Down) (SDLP): Following convention I shall refer to the hon. Member for Rochford and Southend East (James Duddridge) and say I agree with some of what he said, but I disagree with the vast proportion of his speech because it deals with the general principles of the Chancellor’s Budget.

From the Chancellor’s speech one would think that everything was rosy with the economy, but that is not the case. Many people, including those in Northern Ireland, are experiencing a very different reality—a reality that the current Government are almost completely out of touch with. Families are faced with rising food

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bills, sky-rocketing energy costs and stagnant wages. This is pushing more and more people into personal debt and we could be faced with a personal credit crisis as people over-extend credit cards and use payday loan companies to cover rising bills. The Governor of the Bank of England, Mark Carney, warned just yesterday that excessive borrowing was again posing a grave danger to the economy.

The employment figures announced today do not tell the full story, with a vast proportion of these new jobs coming from self-employment, temporary positions and zero-hours contracts. Many of these jobs are unstable and reflect not a true recovery, but a permanent low-wage economy. The figures are not geographically consistent. According to the Department of Enterprise, Trade and Investment in Northern Ireland, the local employment rate of 72% is the lowest of any region, and unemployment remains stubbornly high at 7.5%, compared with the UK average of 7.2%.

This is to say nothing of the tragedy of joblessness faced by our young people. Youth unemployment stands at nearly a million in the UK and more than 20,000 in Northern Ireland. About one in four of our young people cannot find a job, which will have a devastating impact on our economy and on their own lives in the coming years. Many have emigrated and many more face emigration. PricewaterhouseCoopers has said that this will cost the Northern Ireland economy £l billion by 2016. The Chancellor said nothing new today that makes me think he grasps the scale of the problem or is seeking the necessary remedies.

Jim Shannon: The Government have made concessions on the transferable tax allowance and on child care provision, but they have omitted to make any allowance for single-earner families where one of the parents goes to work and they forgo a second salary so that they can invest in the life of their children. There is provision for those at the higher level of taxation and provision for those at the lower level of taxation in respect of child care, but for those in between there is none. Does the hon. Lady agree that there is a shortfall in the Government’s child care provision for that section of the community?

Ms Ritchie: Yes, I agree. The Government need to make provision for that section of the population.

With respect to welfare, the supposed recovery is not a balanced one, as this Government continue to attack the most vulnerable and worst-off while giving handouts to those at the top. This political sleight of hand, blaming the poorest in society for the economic woes caused by the banking collapse, which has been repeated by the Chancellor in Budget after Budget, is deeply cynical and should not go unchallenged. The Government’s divisive rhetoric and continued draconian approach to welfare reform is of great concern. The current roll-out of universal credit is unravelling at an alarming rate, yet we are expected to accept even more of this misery for the worst-off in society. We have valid concerns about these measures in Northern Ireland, yet the British Government and the Department for Work and Pensions continue to try to force this issue through with threats and grandstanding.

Today, we hear of further attacks on the most vulnerable, with the introduction of a cap on welfare spending. I have great fears that this proposed cap will be used in an

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entirely pernicious manner, with little consideration given to need. As always with the Budget, the devil will be in the detail, and I will be fully pursuing this in subsequent weeks. In particular, concerns have been raised as to exactly what benefits will and will not be included in such a cap. I have since been informed that benefits such as disability living allowance, carer’s allowance and bereavement benefits—the very benefits that affect some of the most vulnerable in our society—will be impacted upon.

Although some elements of the Budget are to be welcomed, I have a concern in respect of one sector. The tourism sector is absolutely vital for our economy in Northern Ireland. The measure announced in relation to air passenger duty is extremely limited and will do nothing to lower the excessive rate of duty on flights within the UK and to Europe—such flights form the vast majority of those to and from Northern Ireland. We are still faced with the highest rates of APD and VAT on tourism products in the EU. Almost every EU state has some form of reduction in VAT for the tourism industry, and just last month I held a debate asking for the Treasury to consider introducing a similar scheme in the UK, which would provide an instant boost for the tourism industry and our tourism sector in Northern Ireland. It was notable during that debate that MPs from across the House supported my proposal, including many of the Chancellor’s own Back Benchers. The lack of movement on either of those issues was a glaring omission from today’s Budget.

We see Ireland as an island tourist market, but businesses in the north face a 20% rate of VAT, whereas the Irish Government have taken the sensible step of keeping their rate at 9% for tourism products. Regrettably, the only border for tourists moving between the south and the north is an economic one, brought about by the decisions of the UK Treasury. I ask the Chancellor again to take a hard look at a cut in the rate of VAT for tourism products, which would become budget-neutral after the first year, according to Professor Blake, who used the Treasury’s own economic model.

Jim Shannon: Will the hon. Lady give way?

Ms Ritchie: I am sorry, but I cannot give way again, as I am conscious that other Members wish to speak.

We are also seeking clarification on the aggregates credit levy scheme. I have had much correspondence with the Chancellor and Treasury Ministers on that issue, and I understand that we may be nearing a positive conclusion with the European Commission. So it would be helpful if we could get clarification on that issue, and on the whole area of the Barnett consequentials for flood defences, because I represent a coastal constituency whose coast has been undermined by the impact of climate change.

This was a political Budget from a political Chancellor, and it comes at the cost of the real economy. It will give little comfort to people who will continue to face low wages and high costs.

5.13 pm

Gordon Birtwistle (Burnley) (LD): I have sat through this debate for the past four hours, listening to the doom merchants from the Labour party, so I would just like to advise them of the position in my constituency,

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not what people would class as a high-wage, high-cost constituency. In 2010, we had unemployment in excess of 10% and we were in the top 10 of the worst unemployment blackspots in the country. This morning I got the figures for my constituency, and unemployment has now dropped to 5% and the town is listed 173rd for unemployment. That is a dramatic recovery.

The increase in personal allowances was the major issue for me in the Budget. It was something that I had campaigned for and that was on the front page of the Liberal Democrat manifesto at the last election—[Interruption.]

Jake Berry (Rossendale and Darwen) (Con) rose

Gordon Birtwistle: I will give way to my hon. Friend and leave out the shouters on the Opposition Benches.

Jake Berry: Let me touch on the unemployment figures in east Lancashire. Like me, my hon. Friend will want to congratulate Rossendale and Darwen as well as Burnley on their reducing figures. Does he not accept, though, that the fact that the three-month claimant count in the north-west has gone up shows just how fragile the recovery is and how dangerous it would be to go back to the Opposition party’s policies of more borrowing, more debt and higher unemployment for east Lancashire?

Gordon Birtwistle: I thank my hon. Friend for that remark. When it comes to the north-west, I can only speak about my constituency of Burnley, which is a prosperous manufacturing town. We have invested heavily in manufacturing over the years, and I am pleased to say that we are not one of the problems in the north-west.

I am delighted to hear about the continuation of the triple lock on pensions, which is great for pensioners. I have to declare an interest as I am a pensioner and I understand how it all works. I welcome the end to the hideous 75p rise that was awarded to pensioners under the previous Government.

I am also delighted that we still have the excellent pupil premium, as I have a number of junior schools in my constituency. One school alone receives more than £100,000 a year to help children from really poor backgrounds.

My main interests are manufacturing and apprenticeships. The Chancellor’s decision two Budgets ago to introduce capital allowances was something that I had argued for and that he had agreed were a great idea, but as the scheme had run for two years, I fully expected him to cancel it in this Budget. However, he did not cancel it; he doubled it to half a million pounds a year. An Opposition Member said that she could not understand the reason for capital allowances. She asked what they could do for manufacturing. Obviously, she has never been involved in manufacturing, and probably has never been in business. She is probably one of the few Members who do not understand what is going on.

I also want to comment on the amazing rise in apprenticeships. In my role as apprenticeships ambassador, I have been able to visit apprentices in different industries across the country. I have seen apprentices build Typhoon fighter jets at BAE Systems in Preston, missile systems in Bolton and Airbus aircraft wings in Chester. I have

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also seen the other side of manufacturing. Only yesterday, I went to see apprentices at Starbucks in the Westfield shopping centre in White City and they showed me how to make a proper latte with a fancy topping. I met some amazing young people.

I have also met apprentices at Next—one would not expect that such industries would have apprentices. The young apprentices at Next were absolutely amazing and a credit to the young people of this country. I did not realise that Next ran such an excellent apprenticeship scheme, which rivals the one run by Rolls-Royce. Next is committed to its young people, and it sees apprentices as its assets for the future. It is fantastic to see the massive rise in apprenticeships. Apprentices are the future—[Interruption.] If the hon. Member for Swansea West (Geraint Davies) wants to intervene, I am happy to give way.

Geraint Davies: I am amazed that the hon. Gentleman compares the apprenticeships at Next with those at Rolls-Royce. What a disgraceful thing to say about one of our foremost companies. Picking socks is not the same as fixing engines.

Gordon Birtwistle: If the hon. Gentleman had listened rather than talked to his friends, he would have realised that I was talking about the apprenticeship scheme, and not the apprentices themselves. Next treats apprentices properly, and they go through a proper three-year training programme, as do the Rolls-Royce apprentices. It is a different industry, but those young people are as keen as the apprentices at Rolls-Royce to have a proper career—rather than the career that the Labour party offered them when they were in government—and one of which they can be proud.

The hon. Gentleman might not think that is a good idea, and perhaps in his constituency he would like young people to go on Government training schemes that deliver nothing. These schemes are delivered by proper companies for young people.

Simon Danczuk (Rochdale) (Lab): Youth contracts.

Gordon Birtwistle: They are not youth contracts. They are proper training schemes, and young people are absolutely delighted to be on them. I am appalled that the hon. Member for Swansea West should try to decry them. It is absolutely disgraceful, and he should withdraw his comments.

Damian Collins (Folkestone and Hythe) (Con) rose—

Gordon Birtwistle: Unfortunately, I cannot give way, as I have done so twice, and I regret giving way the second time.

I welcome the new pension scheme. It is a fantastic scheme, but I would like—and this is something a number of my constituents have asked for—an end to the problems with Equitable Life. It is time that the Government looked at how we can finally wind up the problems with Equitable Life. Many Equitable Life members are now very elderly, and they would like a conclusion to the problems, which should have been sorted out by the previous Government. I believe that we should step in and sort them out. It is not a lot of money, so we should do that.

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I welcome the Budget. The Government are working towards delivering a strong economy. They are delivering a fairer economy, they are creating jobs for our young people, and they are creating security for our industries. The previous Government had one major success: they managed to reduce manufacturing from 22% to 9% without trying. That was an absolute scandal of their 13 years in office. Fortunately, we are now bringing manufacturing back, and we are bringing apprentices back. Manufacturing is climbing again, and it is saving this country from the mess it was left in.

5.22 pm

Yasmin Qureshi (Bolton South East) (Lab): There was much in the Chancellor’s speech with which I disagreed, but at least I gave him the courtesy of listening, unlike Government Members, who gave no such courtesy to the Leader of the Opposition. In fact, when my right hon. Friend was talking about the crisis of living standards, there was a great deal of laughter among Government Members. The country will have seen exactly what they stand for.

The Chancellor began his speech—and Government Members have repeated this—with the mantra, “Oh, the recession was caused by the Opposition.” Somehow, it was financial mismanagement by the Labour Government that caused the economic crisis. That is not true, because there was a worldwide recession. Perhaps I can help Government Members with some facts and figures. When Labour came to power in 1997, the ratio of gross domestic product to national debt was about 47%, but by 2001, after four years of Labour government, that percentage was in the low 30s. [Interruption.] It came down to 33%, so it was 10% less than it was when the Conservative party was in power. It was not until 2008-09 that the ratio of GDP to national debt went up. Everybody knew why it did—there was a global recession. At the end of the day, the Labour party was not in power in the USA, Japan, Germany or other countries. To claim that the financial crisis was somehow caused by the Labour party’s mismanagement is complete and utter nonsense. Government Members should really stop peddling these myths and lies.

Damian Collins: The hon. Lady has missed out the fact that the Labour party was running a deficit before the recession, when the economy was growing. That is why we were in the mess we were in.

Yasmin Qureshi: That is absolutely wrong. A few years after we came into office, the amount of the receipts coming in was more than the national debt, the GDP net. After the debate I can certainly give the hon. Gentleman the facts and figures from the Institute for Fiscal Studies, which show how prudently we looked after the economy. Yes, we spent, but guess what? We spent on hospitals and schools. We took millions of children out of poverty. We provided working tax credits for poor families. I do not remember Opposition Members at the time complaining when new schools and hospitals were being built or refurbished in their constituencies. I do not remember any Members complaining about that. That was real investment. The suggestion that the previous Labour Government spent money on throwing parties or something is ridiculous. It was real investment in our country’s infrastructure, which created jobs and made ordinary people’s lives better.

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Mr MacNeil: The hon. Lady says that no Members complained when schools were built in their constituencies, but they did. I remember writing long letters about the private finance initiative and the false comparison with the public sector, which was based on a false equation. I think they were built expensively under the Labour Government. I am sorry to have to bring that up after she was so generous in giving way.

Yasmin Qureshi: I agree that there were some problems with PFI. I am not one of those who say that everything was perfect. However, to suggest that spending on our country’s infrastructure, which created jobs, made people better off and led to between £80 billion and £90 billion being spent on the national health service, was somehow a waste of money is, I think, a real insult to the people of this country.

If my memory serves me correctly, the Opposition at the time agreed fully with the Government’s spending analysis. They did not object to any of it and said that they would carry on spending at the same rate. Therefore, to try to suggest that somehow money was spent recklessly is absolute rubbish. The myths that Government Members have been peddling for the past four years should stop. The Government parties should recognise that they have been in power for four years and should start thinking about what they have done.

We know that on average families are £1,600 worse off. Energy prices have gone up and up. We have said that there should be an energy price freeze until 2017. If the Government really want to help ordinary people, why do they not do that and reform the energy sector? The education maintenance allowance, which helped 16 to 18-year-olds from poor families to stay in school, was abolished, which again hit the poorest in our society the hardest. The Chancellor today announced a new garden city, but it has taken him four years. We have been arguing for four years that more house building projects are needed. It is great that something is now happening, but we have had to wait too long for it.

I would like the Chancellor to have frozen energy bills until 2017, which would have been really helpful. Young people should have been put back to work with a jobs guarantee scheme, which we have said would be funded by a tax on bankers’ bonuses. Free child care should be extended to 24 hours for three to four-year-olds, and we should also cut taxes for 24 million people on lower incomes, with a lower 10p starting rate of income tax. That would help a lot of ordinary working people. The Government should also cut business rates for small firms so that we can create more jobs. That, too, would help ordinary people and small businesses.

Finally, we should consider the issue of equality, pay gaps and wealth distribution. It is said that things are better now than 28 years ago, but recently there have been various articles and a lot of discussion about the fact that the pay gap is too large. Even the International Monetary Fund, hardly a hotbed of communism, has said that countries with a great deal of inequality have economic as well as social problems as a result. Steps should be taken to narrow the gap even more. There should have been real measures to tax the really wealthy in our society, especially their homes, so that we can reduce the gap.

Even Her Majesty, who is not known for getting involved in the political issues of the day, has expressed

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concern about the level of poverty and the situation of the poor. If the Queen starts getting involved in these issues, that is a wake-up call for everybody—not just for the Government, but for my party. However, the coalition is in power and it should be looking at the issue of inequality.

Apart from the fact that it is only right that society should be more equal and fair, addressing inequality makes economic sense. Problems with mental and physical health often arise from financial difficulties and cost the economy about £40 billion. Addressing inequality makes sense, but there was nothing in the Chancellor’s speech that helps the ordinary working poor person.

Several hon. Members rose

Mr Speaker: Order. I am sorry to have to tell the House that, to get more colleagues in, I must reduce the time limit, with immediate effect, to six minutes—a reduction of one minute.

5.32 pm

George Freeman (Mid Norfolk) (Con): It is a pleasure to follow the hon. Member for Bolton South East (Yasmin Qureshi).

I suggest that today’s Budget was a significant and historic one for this country. Twelve months before a crucial general election, it gave the British people a clear choice. It showed through the Office for Budget Responsibility report the success of the last four years’ work of rebalancing and laying the foundations for long-term growth. It showed us a Chancellor and a Government committed to the long-term programme of recovery on which we had embarked. It was a Budget for resilience, responsibility and the real economy.

I particularly want to highlight three elements: first, the extent to which we have finally begun to get on top of the appalling historic legacy of debt that we inherited from the Labour party; secondly, the significant steps that we set out to support science, innovation and export-led growth; and thirdly, the historic package of support for savers and pensioners.

Dr Julian Huppert (Cambridge) (LD): Will the hon. Gentleman add the Cambridge city deal as a fourth point? That will contribute so much to what will help his constituents, as well as mine.

George Freeman: I am delighted that the Chancellor has been able to support the Cambridge city deal, which will play a key part in our innovation economy.

We should take time to remember the mess that we inherited four years ago, and the causes of it. The truth is that between 1997 and 2010, we saw the largest increase in public spending as a percentage of national income of any industrialised country. During that period, we rose from 22nd to sixth in the world league table for public spending as a percentage of national income. Before Opposition Members try to argue that that was a result of the global crash—indeed, after they have tried to do that—I should say that if we take the date of 2007, before the crash, we see that our position on the table had risen from 22nd to 10th. That is the second largest increase in history.

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That legacy was created by a wilful overspend by the Labour party. It left us, in 2010, with the biggest peacetime budget deficit in our history—a £157 billion deficit and a £1 trillion debt. If we pay off that debt at £1 million a minute, it will take us 30 years. The truth is that everybody in this country is now paying for that. We inherited a situation in which debt interest alone was set to rise to £70 billion a year. When we started, debt interest alone was, in effect, the fourth biggest Department of State, and we were borrowing £1 for every £4 spent. It was an absolute disgrace for the outgoing Labour Government’s Chief Secretary to have left a note with an exclamation mark saying that he thought it was funny that there was no money left. We should remember that. I do not think it is a joke, because we are all paying the price.

That is why I welcome the Chancellor’s announcement of the OBR’s reporting on the progress that we are making in our deficit reduction plan through the 80:20 rule—80% from spending and 20% from tax. These were tough decisions—all of which, we should remember, were opposed by Labour—and they are now beginning to lead to sustained long-term growth. Growth is up to its highest level for 30 years, and we are now the fastest growing economy in the G8. Some 1.5 million private sector jobs have been created—three for every one regrettably lost in the public sector. There has been a 24% fall in unemployment, with the fastest fall in youth unemployment for 20 years. As a result, we are now on track to eradicate the deficit by 2018 and we are paying off debt quicker than any other western economy. That is a record of which we should be proud and a record to which this Budget stands testament.

I want to highlight the important work that the Government are doing from that platform to support our innovation economy. Today’s announcements on science and technology and the knowledge economy included £42 million for a new Alan Turing institute of big data, in which Britain is leading the world; £74 million for the cell therapy manufacturing centre and the graphene innovation centre, putting Britain at the cutting edge of new technologies that will turbo-charge new industries and new business creation; and £106 million for 20 doctoral training centres across the country.

We have an enormous opportunity to trade our way out of the debt crisis by plugging into the fastest growing emerging markets around the world, particularly in the life sciences, in food, in medicine, and in energy. In 30 years, those economies will go through the same industrial and agricultural revolution that we started and went through in 300 years. They represent vast markets for our knowledge economy. That is why I particularly welcome the support for export finance. As a trade envoy and a former business man myself, I know how important it is to support our small companies. We are starting from a woefully and shamefully low base. After 13 years, Labour left us very weakly linked into those emerging markets. We still export more to Luxembourg and Belgium than we do to China. I am delighted that the Government are making such progress.

You do not need to take this from me, Mr Speaker—take it from the business community. The Institute of Directors has said:

“This is a responsible and imaginative budget which should promote growth, exports and investment. It will be widely welcomed.”

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The British Chambers of Commerce said this afternoon that the Budget was

“disciplined, focused, and geared toward the creation of wealth and jobs”

and that it “passes the business test”. The CBI has said:

“The Budget will put wind in the sails of business investment, especially for manufacturers.”

I turn to the historic announcements on savings and pensions, with the pensioner bond, the new ISA, the abolition of the 10p rate on savings, the child trust fund, and the increase in the amount that can be invested in the junior ISA.

Mr MacNeil: There is often a problem with the governance of ISAs when the banks attract savers into ISAs and then change their rules and boundaries so that within a year they are no longer selling that ISA but have moved on to the next ISA pot. Sometimes savers may be ripped off by banks that have not been responsible in managing their ISAs properly in moving the vehicle that the money is in and lowering the interest rate after a year or two.

George Freeman: The hon. Gentleman makes an interesting point. The bigger point is that in the 1980s the Conservative party launched a historic renaissance of saving and wealth creation whereby more and more people, through ISAs and PEPs, were able to own shares and save. That was wilfully destroyed by the former Labour Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), through his stealth taxes. It has long been necessary for us to restore a culture and a set of incentives for a genuine renaissance in savings, and that is key to the resilience that the Chancellor set out today. That was the most important set of measures in today’s Budget, and it will stand the test of time.

What did we hear from Labour Members? I came here genuinely wanting to hear the Opposition’s response to this package. I wanted to hear the alternative economic policy that Labour is going to put to the British people next spring. For all the noise we hear on the Government side of the House, the real test, as we know, is the silence from the Opposition Benches. What we heard today was an embarrassing descent into business bashing and class war. If that is what the Leader of the Opposition defines as his “new socialism”, I wish him luck. I will be sending a copy of his speech to all the businesses in my constituency, because it fails the business test in spades, and it is the business test that will drive the growth and investment on which the public sector always depends.

Ian Mearns: Will the hon. Gentleman also be sending them a copy of the noise that was being generated by Government Members during the speech of the Leader of the Opposition today?

George Freeman: I will have a chance to read Hansard. I am not surprised there was noise. It was a shameful performance. When, 12 months from the election, this country needs a choice, and Her Majesty’s Opposition are supposed to set out an alternative economic policy, it was woeful. It gives me no pleasure to say it. The result is that the choice is now clear: a Chancellor, a Government and a Prime Minister with a long-term plan for resilience and recovery, led by the real economy

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and investment, and a Leader of the Opposition who seems now committed simply to going into the election on a ticket of partisan politics and gesturing to his trade union funders. It was not a Budget response that merited his title. It did not set out a serious economic programme for recovery, and I am afraid that it deserves the response that I think it will get at next year’s general election.

5.40 pm

Mr David Lammy (Tottenham) (Lab): I am grateful for the opportunity to speak in this Budget debate. I begin by welcoming the Chancellor’s announcement on new housing developments at Brent Cross and Barking-Riverside, and the overground extension at Barking. Those are much needed in London. There were also important announcements for the air ambulance service in London, particularly a reduction in VAT on fuel, which I know will be welcomed by the London ambulance service. For those who have campaigned for many years on air passenger duty—the Minister will recognise that that has been a real sore in the Caribbean community throughout this country and I know that Northern Ireland Members have also raised the issue—the announcements were surprising but very welcome.

I had hoped that the Chancellor would deal with one of the central challenges in our economy, which The Spectator described as one of the biggest and most disturbing social changes of our age: the polarisation in the unemployment market, referred to in a BIS report last year. Britain now has an hourglass economy, with a significant chunk of jobs at the top end—those on huge salaries in the banking industry or those who are part of the global industrial nature of our world—and a shrinking of jobs for those in the middle level and those who are working up and hoping to take part in our economy. It is why there is such a debate about the living wage and the minimum wage. We heard nothing in this debate about how we are to deal with this hourglass economy.

Our economy has lost 1.2 million semi-skilled jobs that so many hon. Members would have recognised just a few decades ago. I am talking about the manual operators, the secretarial and administrative jobs that existed in our economy. People are being squeezed as a result. Of the newly created jobs, 300,000 are in customer services. The number of men working in customer services has risen by 46%. There is a real issue about the quality of jobs in this economy, and how working people can provide for their families. Some 88% of Londoners are now reliant on the service economy. The fundamental question for any Chancellor is whether that is satisfactory when the bulk of those services are in the retail economy. We say that the economy is looking better and consumers are spending a bit more, but can we not learn from the economic crash in the first place and ask for an economy based on creativity and innovation, and not one based on consumption and predatory practices, as the Government seem to applaud without dealing with the structural problems in our economy?

I want to see more manufacturing in our capital city. If New York can do it, so can we. Advanced manufacturing means that people are paid more. We ought to be setting that as our aim, but the Budget did not seem to deal with those issues. Of course one welcomes the extra 15,000 homes in Ebbsfleet, but the vision is poor. Eleven new towns were set up in the Abercrombie plan—look

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to Stevenage, Crawley and Peterborough, where I went to school. The idea that we will solve our housing crisis with 15,000 homes is, frankly, pathetic.

In London, people’s rents have increased eight times faster than their salary and an average property costs 16 times the salary of those who want to buy their own home. The average age of a first-time buyer in London is 38 and they are doing it with the help of the bank of mum and dad: 70% of them are borrowing from their parents in order to get a deposit and get on the ladder. I did not hear enough about how this Budget will deal with the big housing challenge this country faces.

I welcome the decisions on energy in particular, but if we are really going to be a creative economy and the innovation nation that we have to be in order to compete with so many other countries, research and development is critical, but spending on it in Britain dropped again last year by 8%. What was in this Budget to support R and D and ensure that we will be the innovation nation that we have to be? Not enough.

The Budget felt complacent. It gave the impression that all is good. Apparently we are all in it together, but in fact, when this House votes on the Budget, we will be voting, in effect, for an increase in our pay, because the thresholds have changed and we will benefit. My concern is for the many out there who will not benefit from this Budget—the many who are dependent on an economy with structural problems that are not being addressed, on housing and on those jobs that that this country needs. We should see more from this Government.

5.46 pm

Andrew Selous (South West Bedfordshire) (Con): It is a pleasure to follow the right hon. Member for Tottenham (Mr Lammy), who understands the need for strong families.

I want to deal head-on with many of the points that have been made about the financial challenges that people face. The facts are that the recession this country faced was much deeper than we thought; at the same time, this country faced a huge commodity price shock, with energy and food prices going up significantly; and our major market in the eurozone, where half our exports go, was flat on its back. Those were significant challenges.

The Chief Secretary in the previous Government, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), pointed out that wages for lower-paid workers had been rising very slowly since 2003. On top of that, there was a huge wave of immigration under the previous Government. Between 2005 and 2010, there were 413,000 fewer British people and 736,000 more foreigners in employment. Those are official figures from the Office for National Statistics. That had an impact on driving down wages, which has been at the root of many of the concerns we have heard from the Labour party.

How do we deal with low wages and create a high-wealth economy so that we can deal with the issues of poverty we have been discussing this afternoon? We do it by having world-class schools. This is a Government who are not content with British children getting better educational results than the previous year—they want

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them to match the results of those in the highest performing countries. We do it through highly skilled apprenticeships: the number of people going into apprenticeships has doubled, and some 2 million apprenticeships have been launched under this Government. We do it by setting up university technical colleges nationally—my constituency has Central Bedfordshire UTC—to make sure that our young people have the skills to go on to earn decent wages in productive industries. That is how we will deal with productivity, because the money is there to be earned.

Government Members think it is morally unacceptable to pass this generation’s unpaid debts on to our children and grandchildren. It is frankly shameful that this country has not lived within its means since 2001. The fact is that every four days we are still spending £1 billion more than our income. That is why we have further work to do on getting the budget back in balance. As the Chancellor reminded us at the start of his speech, we still have one of the highest deficits in the world.

In their first term, the Labour Government brought down debt as a proportion of GDP from, roughly, 40% to 30% when they followed Conservative financial plans, and I commend them for that. To be fair, they were right to do it.

We have created 1.7 million new private sector jobs, with 400,000 new businesses set up, and we are looking at a real-terms increase in the minimum wage to £6.50. I may add that cleaners at the Department for Work and Pensions are now on the living wage, which was not the case under the previous Government. For the first time in 35 years, the United Kingdom has a higher employment rate than the USA.

For pensioners and savers, the Chancellor has today announced fantastic and really significant changes. I remember saying in opposition, in one of my first speeches in this House, that I wanted people to have the same sense of ownership in relation to their pension as they have in relation to their house or their car, and we have moved significantly towards that today. People will feel that they own this money and have much greater control over it and much greater flexibility, which is all hugely welcome.

The tax cuts coming in are hugely significant. The investment allowance is going up to £500,000. Fuel duty has been frozen. Council tax has again been frozen. The personal allowance will increase to £10,500. Corporation tax has been cut from 28% to 21%. Business rates for smaller businesses will be cut next month by £1,000, which is brilliant for our small shops and businesses. Employers national insurance contributions will also be cut from next month by £2,000. A penny is being taken off a pint of beer. From next April, national insurance will not have to be paid for everyone under 22. All those measures will help enormously, as will the cuts in energy costs, which I was delighted to hear about because they are absolutely necessary. I very much welcome the fact that families will get a further £15 off their energy bills, while mid-sized manufacturers will get £50,000 off their bills.

What the Chancellor said about exports was fantastically significant. Going from the least competitive to the most competitive export finance regime in Europe is fantastic. I am the son of a small manufacturer who exported all over the world, so this is in my blood. I get hugely excited when I see businesses in my

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constituency—BE Aerospace, Honeytop Speciality Foods, Strongbox Marine Furniture—exporting all around the world. We need to give them more help, and we need more exports.

The Chancellor said that this is a Budget for resilience, and it is good that this Government are trying to encourage resilient families. The number of children living with both parents has increased by 250,000, going up from 67% to 69%; and it is particularly welcome that the figure has gone up from 45% to 48% for low-income families.

Finally, I hugely welcome the cut in VAT on air ambulances. Many mayors in my constituency have raised money for the air ambulance in the east of England.

5.52 pm

Geraint Davies (Swansea West) (Lab/Co-op): It is a great pleasure to follow the hon. Member for South West Bedfordshire (Andrew Selous), who seems to have been spellbound by the Wizard of Osborne’s Wonga economics.

I say that because since the arrival of this Government, debt as a share of GDP has risen from 55% to 75%, and it will rise to 80% when they leave office next year. [Interruption.] Contrary to the mutterings by Government Front Benchers, the reality is that the previous Government did a very good job in increasing GDP by 40% in the 10 years to 2008 and, when they faced an international crisis, by engaging in fiscal stimulus—with President Obama—to avoid a deep depression and give us a shallow recession, so that by 2010 we had the modest growth that was then destroyed by the current Chancellor. He announced 500,000 job cuts in the public sector, which basically stopped consumption and flatlined the economy, which is why the debt has grown and why this Government have borrowed more in three and a half years than the previous Government did in 13 years.

The Chancellor says that there is now growth, with a new recovery, but if we analyse that growth, we can see that lending by banks in the form of mortgages and consumer debt is at the same level as in 2008, while lending to business is down by 30%. That is why productivity has fallen—down 5% in Britain, compared with an 8% rise in America—and why this is not sustainable growth rooted in the real economy, but just a bubble in the housing market that will burst once interest rates go up, as they will when unemployment goes below 7%. After the next election, the bubble will blow up in people’s faces, as happened with sub-prime debt, because people do not have the income to pay the higher mortgage costs that will follow a rise in interest rates.

Government Members say that everything is rosy and that incomes are going up, but the people who are worst off are those on jobseeker’s allowance who are desperately looking for jobs. As I mentioned in an intervention, in Swansea 65% of people who are on JSA have been sanctioned. They have less than £72 a week to live on, but they are having money taken away for not turning up to Work programme appointments that they were only notified of the day after the appointment should have happened. That is a dreadful situation.

I met somebody last week who has chronic disabilities. He has a major heart condition. Although he is 28 years old, he was judged to have the physique of somebody of

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98 by his consultant. He went to Atos and got zero points. He is now in a state of malnutrition, along with his other problems. He is unfit to work.

We all welcome the increase in the tax allowance. That will cost about £1.8 billion. There was choice about that this year.

There has been some talk of inequality being at a 25-year low. However, the changes in benefits will increase inequality. The poorest spend a greater proportion of their money on indirect taxes—some 30% for the poorest fifth compared with 14% for the richest fifth—but the Tories have decided to give money away through direct taxes, because that helps people who are better off. That is only what we would expect.

The major initiatives on exports, such as credits for exports and support for UKTI, are to be welcomed, but let us not forget that the trade deficit has grown by 15% from £100 billion to £115 billion since 2010. We welcome the increase in building, but let us not forget that the target is lower than the increase required by population growth alone. Companies such as Taylor Wimpey and Barratt are saying that they will build a maximum of only 15,000 homes a year each. All the money is being funnelled by the banking system into mortgages, which is lifting the price of existing houses, rather than into building new houses, so Help to Buy is obviously a political ploy that will blow up in our faces.

There have been cuts in infrastructure over the past two years, and they are beginning to pick up. High Speed 2 will not arrive until 2030. The Prime Minister said that he would electrify the railways in the valleys, but now he is saying that the Welsh Government should do it. The Government have given borrowing powers to the Welsh Government and so have said they have to pay for it. That was a clever bit of footwork. There was a 49% cut in road building between 2010 and 2012, and there are no new motorways or highways.

I welcome the cuts in energy prices for companies such as Tata, which is local to me. However, much of the problem was created by the Chancellor’s carbon pricing in previous Budgets.

Obviously bingo is great. If people go down the pub and buy 200 pints of beer, they will now get one pint free. That is great as well.

Overall, this is a political Budget that is focused on the better-off and the south-east, and that cuts the public services that people rely on. It could have been better for businesses and for people. We want a one nation economy, not two nations in Britain being pulled apart. We want fairness and strength, but we will not get them with this lousy Budget.

5.58 pm

Damian Collins (Folkestone and Hythe) (Con): Mr Speaker,

“By making a better business environment his top priority, the Chancellor has recognised that successful and confident companies are the key to transforming Britain’s growing economic recovery into one that is felt in homes and on high streets.”

That was the response this afternoon of the director general of the British Chambers of Commerce. It reflects the fact that the Budget takes place in an economy where growth is established—it is set to grow faster than any other developed economy in the world—and where unemployment has been falling consistently and steadily.

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More than 1 million jobs have been created in the private sector across the country. Today’s unemployment figures provided further good news. In my constituency, unemployment fell again. Unemployment is 20% lower than it was at the time of the last general election and I hope that it will continue to fall. That is making a difference to people’s lives and circumstances.

I am sometimes dismayed to hear Opposition Members decrying the number of jobs that have been created and pretending that they are not worth anything. The best thing that we can do in the economy is get people back into work, and there are a variety of jobs that people want to do. In an intervention earlier, the hon. Member for Swansea West (Geraint Davies) seemed to dismiss a job for a young person as an apprentice in the retail sector as one that was not worth having, particularly in the fashion and textile industry. I find that absolutely staggering, because it is an important industry that people want to go into.

I welcome the extra investment in the apprenticeship programme announced today. The programme has helped a lot of young people get into work, and I have seen it work to great effect in my constituency. At an event that I attended with the Federation of Small Businesses last week, I was pleased when it said that because of growth and falling unemployment, one of the big demands from employers is to have more skilled people to recruit from. Investing money in apprenticeships, further education and skills training is important in meeting that demand.

The Chancellor reminded us today of the cuts in business taxes that the Government have put in place, particularly the headline cut in corporation tax from 28p to 20p in the pound next year, which will make a big difference, including to smaller businesses on the high street. One of the great tests that I apply in Folkestone and Hythe to see how well the local economy is doing is what the high street looks like. Is it busy? Are people out shopping? Are businesses trading? I am pleased to see more new independent businesses opening and taking shape, and more entrepreneurs setting up their businesses in incubator spaces such as the Workshop in Tontine street in Folkestone. Town centre businesses will benefit from the £1,000 cut in business rates that the Chancellor announced in the autumn statement and the £2,000 employment allowance, which will go to smaller businesses.

The cuts in income tax will benefit a huge number of people across the country. More than 3 million people will benefit from the lifting of the personal allowance to £10,500, and 45,000 people in my constituency will be better off as a result of the changes in income tax that the Chancellor has announced.

I also particularly welcome the Chancellor’s focus on what he called “the makers”, who are an important part of our economy. The right hon. Member for Tottenham (Mr Lammy) said that we should do more to support and stimulate the creative economy, but we have done a huge amount. The Chancellor confirmed today that the European Commission has approved the production tax credits that were announced in the previous Budget for the video games industry, high-end TV production and drama and the animation sector. Those policies are now bringing investment into this country and into a rapidly growing industry. The film and television sector in this country is booming and sustains a large number

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of jobs across the creative sector, not just those employed in it directly. The Chancellor was absolutely right to say that he wanted to extend those production tax credits to theatre, including regional and touring theatre.

I know that many people in the drinks industry, as well as drinkers, will welcome the cut in beer duty and the freeze on whisky duty. Last week, I met some winemakers at Chapel Down in Kent, who work in an important and growing area of the UK drinks industry. I am sure that they will welcome the scrapping of the duty escalator, but what was more important to them in today’s Budget were the incentives to invest in the growth and development of their business. They are much more concerned about growing and expanding their market overseas, so they will hugely welcome the increase in export finance from the Government to £3 billion and the £500,000 annual investment allowance for businesses, as they invest in the future success of their business.

I wish briefly to mention savers. Many people in my constituency will have been delighted to hear what the Chancellor said today. For a long time, it has been a bugbear of many people approaching retirement that annuities have been poor value, and they have resented being forced into taking out a poor product that they did not want. They now have more freedom. I know that many older people who rely on savings income have been concerned that they have not been able to get the returns that they would like, because banks’ interest rates have been low and the range of products has been limited. The creation of new bonds that will be available to pensioners, with returns of up to 4%, will lead to a revolution in the savings market in this country, as will the reforms to ISAs. Somebody said earlier that they should now be known as NISAs—new ISAs—which is a nice touch. They will be simpler, and people will be able to save more, which will be—

George Freeman: Nicer.

Damian Collins: Exactly.

Like other Members, I greatly welcome the removal of VAT on fuel for air ambulances. Kent, Surrey and Sussex Air Ambulance is a fantastic organisation and has been calling for that change, and it and people across Kent will welcome it.

6.4 pm

Sarah Champion (Rotherham) (Lab): In the lead-up to the Budget, I argued that the Chancellor should use this opportunity to demonstrate a clear Government strategy to support young people and, in particular, I hoped to see him signal a strong commitment to apprenticeships. I therefore welcome the Chancellor saying that he will double the number of apprenticeships, but unfortunately that is not enough to bridge the skills gap.

The fact that youth unemployment remains so high is of concern to us all, and I was heartened to hear hon. Members speaking about schemes in their areas and saying that unemployment is going down. Unfortunately, however, in Rotherham and many other constituencies that is not the case. The current figures paint a grim picture: almost 1 million young people are still not in education, employment or training, and today more

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than 730,000 more young people are out of work or underemployed than in 2005. We are seeing the beginnings of a generational crisis that will not only cause problems for young people today, but create a skills gap that will follow them into the future. If we do not give our young people the training they need to work now, the future of our long-term economy will be at stake.

The impact of the Government’s choices does not end with the economy, because the quality of life enjoyed by our children, and our children’s children, will also be affected. I do not want future generations to worry about where their next meal is coming from, or whether they can afford to heat their house, because they were not given the chance to develop vital career skills when they were young. That is why I felt it so important for the Chancellor to use this Budget to invest more in young people’s skills and training.

Young people want to work. We know that, but there is still a lot more we can do to invest in their future. Regardless of the Chancellor saying today that he will add 100,000 apprenticeships, the number of new apprentices fell by more than 25,000 in the past year. In addition, there are now more than 5,000 fewer under-19s starting apprenticeships than there were in 2009. Supply of apprenticeship opportunities is simply not keeping up with rising demand, with many young people missing out as a result. Added to that are concerns that many apprentices are not receiving the legal minimum wage, and a recent survey showed that 29% of apprentices are not being paid enough. What does the Budget do for apprentices who are not getting the minimum wage? What does it do for young people who want a job but cannot find one?

I still believe that apprenticeships are not being taken seriously enough by this Government as a credible alternative for our young people. The level of apprenticeship applications outstrips the number of available places by 12:1, and the Chancellor’s announcements today will do little to address that. Nationally, think-tanks have reported that England currently has only 11 apprentices in place for every 1,000 jobs. Now is the time for us to turn the tables and invest in young people by creating more apprenticeships of greater quality. The Chancellor says that his plan is working, but if he really had a convincing plan, he would have built into the Budget serious and credible measures to support young people, safeguarding the economy for the future.

Allow me to paint a picture of the crisis in my constituency. The census showed that more than 50% of young people in Rotherham are either unemployed or economically inactive. Let me say that again: more than half of Rotherham’s young people are without a job. They want to work but they have nowhere to turn. Scandalously, that is not even the worst of it. If we compare the number of young people in my constituency who have claimed jobseeker’s allowance for a year under this Government with the equivalent in the last four years of the Labour Government, we see that the figure has increased dramatically. Indeed, I was flabbergasted to find out that that figure had increased not by 20% or even 50%, but by an incredible 760%. That is a 760% increase in young people in Rotherham claiming jobseeker’s allowance for a year under this Government—you couldn’t make it up! That figure alone is enough to make me ask what the Chancellor has been doing to support unemployed young people in Rotherham in the past four years. What

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hope has he offered them in this Budget? The answer is clear: he has done very little indeed, and he is offering them very little hope.

I wish to make a plea to the Chancellor: it is time to start taking the youth unemployment crisis seriously, and it is time to invest the Government’s Budget in young people because they are our future business leaders, construction workers, engineers, and scientists. If we do not act today, we risk creating a generational skills gap. Our society needs a strong, motivated and skilled young work force who will serve Britain not just now, but for long into the future. Young people need serious Budget commitments to support them, not the Budget we were given today that clearly supports the richest few at the expense of all others.

6.9 pm

Toby Perkins (Chesterfield) (Lab): At a time when people are facing a choice between heating and eating, the sight of those ignorant, braying public school boys on the Tory Benches during the response by the Leader of the Opposition showed the contempt that they have for the serious issues that people in my constituency are facing. The speech by my right hon. Friend the Member for Doncaster North (Edward Miliband) spoke far more to the real issues faced by my constituents than did the hour-long lecture that we heard from the Chancellor today.

This is the Chancellor’s fourth Budget and people in Chesterfield know what to expect: a recovery for the few, not the many; a denial that the cost of living crisis is engulfing British families under his watch; and a steadfast refusal to take action on the key issues facing our economy. He said today his core purpose was the economic security of people in Britain; well, he has a funny way of showing it. He should know that despite the increase in the tax threshold, the combination of the VAT increase, the failure to take action on uncompetitive markets, the low wage, low security economy he is creating, and the slowest recovery in history mean that people are poorer under the Tories.

For those feeling the pinch, as families are £1,600 worse off under this Government, there was precious little here. For families struggling with the cost of child care, there was a promise that after five years of rising prices things will get better if only people are fool enough to vote for the Tories a second time. For those who cannot afford a deposit as house prices spiral, there is nothing about tackling the lack of supply but further measures that could increase the prices. For the small business owner desperate to grow and branch out but who has been refused loans by all the major high street banks, there is nothing about the access to finance crisis.

These stories are all too familiar to people in Chesterfield, but their plight is not a by-product of the Chancellor’s plan; it is the Chancellor’s plan. He thinks that Britain’s economy can grow only by winning a race to the bottom, but an economy built on insecure work, zero-hours contracts, and fewer rights in the workplace is a castle built on sand, trapping people between an insecure workplace that seems to say that working people should just be grateful for any work they can get and a benefits system that shatters their dignity and crushes their spirit.

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The Chancellor said that each job makes a family more secure. Well, not under this Government it doesn’t, because many of the 5,000 people who rely on food banks to feed them are in work. The increase in the number of people in work and in poverty is a national disgrace. Under this Government work is not the route out of poverty it once was.

The Chancellor promised us the pain he inflicted on our families would be worth it because two parties had come together to eradicate the deficit, but today we learn that his central purpose—the reason we put up with this Government—which is deficit eradication is still £90 billion away. We should remember what the Office for Budget Responsibility told us back in 2010. It told us that by the end of this Parliament we would have seen growth of 14.6%. Well, from quarter four of 2010 until now growth has been just 3.5%. The deficit will still be £75 billion by 2015-16. The Chancellor’s failure means he has increased the national debt more in three years than Labour did in 13 and he has failed in respect of the cost of living for working families and he has failed to take action on the energy companies.

We know from a ComRes survey released just this Sunday that a pitiful 9% of the public say their ability to pay their monthly bills has improved since the Chancellor entered No. 11 Downing street, and what about yesterday’s Survation poll showing that, when the poll was restricted to people in work, Labour held a 17% lead? Let there be no doubt which is the party for workers. The Chancellor’s priorities could not be clearer: take food from the mouths of families living in poverty to fund a £100,000 cut for his friends in the City earning over £1 million a year.

As shadow pubs Minister it would be churlish of me not to welcome the Chancellor’s temperance when it came to alcohol duty this year, although we should remember both that he is the Chancellor who raised most from the beer duty escalator that he kept for three Budgets, and that his increase in VAT added more to the cost of a pint than the increase in beer duty has done.

On business rates, what we have seen is a Conservative con trick: a £1,000 discount while the underlying rate of business rates is going up—a bomb waiting to go off under the high street recovery. In two years’ time those levels of business rates will have continued to go up and the discount will just disappear if anyone is foolish enough to vote for this Government again. Businesses’ key concerns in respect of the Budget were crystal clear: all the major business groups’ Budget submissions said there must be action on access to finance, yet we have seen absolutely nothing.

This Government are in denial. They cannot understand why people are not thanking them for the recovery they are delivering, but the truth is people know that evidence of the recovery is not appearing in their pockets. We desperately need a jobs guarantee, and Labour’s jobs guarantee will not only take young people off the scrapheap, but it will end the cycle of hopelessness that sees young people trapped in life on the dole. They will not be further impoverished by benefits sanctions, but will have a positive role that says to the young, “You should be at work. We’ll fund the job, you’ve got to take it.”

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This was the Chancellor’s last chance, but, again, when the moment arrived he flunked it. Trapped in an analysis of Britain’s problems that is fundamentally wrong, it is hardly surprising he came up with the wrong answers. People struggling with the cost of living yesterday will still be struggling tomorrow. Parents kept out of the jobs market by the cost of child care have been told to hang on until 2015. For big business struggling with access to finance, absolutely nothing. This Government have run out of ideas; let’s have an election.

Several hon. Members rose

Mr Speaker: Order. As a result of a slew of brief speeches delivered without interventions over the last half an hour or so, I am now in a happy position to be able to raise the time limit on Back-Bench contributions, with immediate effect, to eight minutes.

6.15 pm

Alison McGovern (Wirral South) (Lab): It is an honour and a pleasure to follow my hon. Friends the Members for Rotherham (Sarah Champion) and for Chesterfield (Toby Perkins), both of whom made thoughtful contributions. Those of my constituents who watch Parliament Live TV—some of them do—will have heard their speeches and know that Labour Members are standing up for their concerns. My Merseyside constituents have had three really tough years, and listening to the Chancellor today, I have to ask myself what his message was to them. It is hard to know what he thought he was offering the people of this country. Economic growth is still behind the projections made by the Office for Budget Responsibility in 2010.

I know that economic forecasting is a somewhat interesting art, shall we say—it is not always the easiest thing to do—but it is a little tough to take from a Chancellor who has set great store by his intervention in the world of forecasting that he has effectively not met the test he set himself. He has failed on growth, failed on the deficit, is still behind where he said he would be, and is now trying to rewrite the record ahead of an election. The British people are not so foolish: they will not buy it. They know that the Chancellor said he would cut and cut and cut to protect the credit rating—and, lo and behold, lost the credit rating in any event.

Today’s macro-economic picture shows that the Chancellor is failing the tests he set himself and reheating and re-announcing a whole bundle of things, many of which were actually initiatives of the last Labour Government. Nobody is going to be fooled. Worse than that, he has totally missed the genuine problems in our economy. There is fragility at the lower end of the income distribution scale, and I have real concerns about what is happening at the top. Meanwhile, people in the middle are being squeezed yet again.

I say to those Members who are considering crowing about this Government’s record on unemployment that they seem not to have learned the lesson of the 1980s on the claimant count. It is perfectly possible to reduce the claimant count just by getting people not to claim what they are entitled to, and not to turn up at the jobcentre. If anyone wanted to solve the unemployment problem by getting people not to claim benefits, the DWP’s current strategy would be an excellent way of going

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about it. The culture there is not about helping people to find a job, but making them feel as though they are there to be judged, dictated to and sanctioned. As everybody knows, the Work programme is failing.

Thanks to you, Mr Speaker, in Westminster Hall this afternoon I was able to raise an issue that I have raised time and again: the iniquitous zero-hours contracts and the massive increase in part-time and self-employment, all of which is clouding the true picture of what is going on in our labour market. In speaking up for my Merseyside constituents, I should point out that we have not seen a rebalancing. It was interesting to hear what was said about the Cambridge city deal, which I am sure is wonderful for the people of Cambridge—but Cambridge was doing pretty well anyway. I really do not understand how investing in Cambridge was supposed to amount to rebalancing.

Meanwhile, the north-west is doing pretty well and I am really proud of it, but much of the credit for that goes to the leadership of the cities of the north-west rather than to the Chancellor. Where is the north-east—[Interruption]—and Yorkshire in all this? No effort is being made to address the economic problems there. I urge Conservative Members to look at their history: they will not reconnect with the people of the north of England by ignoring us and pandering to those who view us as unreconstructed, or to the Tory think-tanks that believe we should have a managed decline. But that is not what is happening, and the reality is that the Treasury seems to be straightforwardly ignoring the people of the north of England.

For those in the middle, it is deeply unfair that even skilled people such as nurses are not getting pay rises. Many small business owners raise with me the question of business rates, which my hon. Friend the Member for Chesterfield mentioned, but again that issue seems to have been totally left to one side. Action must be taken on business rates, on energy prices and on the other problems that trouble families in my constituency, who still need to have conversations around the dinner table about how to manage the family finances and who still worry about getting to the end of the month.

At the top end of the income distribution scale, the Chancellor clearly has not learned the lessons of the 1980s, and certainly not of the big bang in 1986 and its legacy of exposing our country to risk in the City of London. I am afraid that is not good enough. Because the Help to Buy scheme covers properties worth as much as £600,000, it risks creating a similar bubble, and many commentators are fearful about what is going on in the housing market. The Bank of England now says that the City might reinflate itself to between nine and 15 times the size of our economy. If that does not look and sound like a genuine risk to the stability of our economy, I am not sure what does.

The Chancellor mentioned broadening the LIBOR investigation, which is a real worry to me, because we have not yet got a handle on the culture in financial services. Plenty of people work in ordinary jobs in financial services, and I am not criticising the sector as a whole. However, the high levels of inequality and the poor culture at the top do not benefit the ordinary people who work in bank branches and call centres, helping people with their banking every day. They, like everyone else, want the sector to be controlled. There are real problems with people on low wages.

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It would be nice to have some recognition for the reinvention of the modern apprenticeship in 2003. My hon. Friend the Member for Rotherham is absolutely right that we need to do much better when it comes to the number of apprenticeships.

We have problems at the bottom; we have a squeezed middle, and no answer has been proposed to their problems; and I have genuine concerns about the long-term stability of our economy.

6.23 pm

Kate Green (Stretford and Urmston) (Lab): There is little in the Budget for families with children. It follows a series of Budgets and spending reviews that have been difficult and disappointing for children and which, the Institute for Fiscal Studies has predicted, will lead to a substantial rise in poverty over this decade.

I recognise why the Chancellor wants to incentivise saving, and of course we want to ensure that pensioners are protected from poverty, but I am concerned that the Budget exacerbates an increasingly unbalanced approach to support between the generations. The first thing that constituents of all ages say to me on the doorstep is how worried they are about the prospects for the next generation.

I am proud that Labour took more than 1 million children out of poverty. The Budget and the Government’s depressingly weak child poverty strategy that was announced the other day represent missed opportunities, and as a result, the gains made under Labour will be all but wiped out. That is not because there was no option: different choices could have been made. The burden of austerity has been predominantly borne by spending cuts rather than by tax increases for the wealthiest, and that has had a disproportionate effect on low-income families.

We know that family benefits have been an important plank in reducing child poverty. According to the Institute for Social and Economic Research, the UK has the second highest child poverty rate, before taxes and transfers, in the 27 EU countries, yet, by the 2014-15 financial year, working age benefits spend will be £22 billion less than in 2010-11 as result of uprating policies, cuts and freezes. That is having an especially harsh impact in households with a disabled family member. One third of people in poverty live in a household with a disabled member, and a quarter of children in poverty live with a disabled adult.

Localising benefits also makes the situation worse. Council tax assistance and local assistance schemes have been criticised by the Public Accounts Committee and the Work and Pensions Committee respectively. The Committees have expressed concern about their impact on vulnerable families. In the meantime, the cost of living is rising—the impact on families with children is especially harsh—yet for first time since the 1930s, the uprating policy for payments for children is now entirely detached from the price rises that affect them. Uprating at 1% bears no relation to RPI or to CPI; the cost of goods and services has risen 15% in past three years. Indirect taxes have hit the poorest families hardest, as a higher proportion of their income is hit.

The living costs that particularly affect families with children have been rising fastest. They include food, energy, rent and child care. This week’s announcement on child care will still leave families without the help

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that they need. The Institute for Fiscal Studies has confirmed there is no new money to fund the announcement, and the number of families benefiting from the scheme is around half what the Government said it would be. Figures revealed in the Government’s latest consultation document show that around 1.26 million families will benefit from tax-free child care, not the 2.5 million claimed in the original consultation document. Also, there is no new support for those on tax credits, who will not be able to access the tax-free child care.

I welcome the increase in support for child care costs under universal credit to 85%, but it is a matter of concern that that will be met from within the universal credit budget. It is therefore unclear where the money will really come from. Universal credit is already running late and over budget, so how can this extra sum be afforded? We also have no firm timetable for all parents being migrated on to universal credit; we know that the programme is experiencing significant delays.

The Government say that work is the best route out of poverty, but the majority of children in poverty live in a household in which at least one adult is working. Tax breaks do not do enough to compensate those families. The Resolution Foundation has found that 75% of the benefit of the increase in personal tax threshold goes to the top half of the income distribution. The Chancellor himself confirmed this afternoon that higher rate taxpayers—those earning up to £100,000—will benefit from the increase in the threshold. Only a tiny element of the cost of the initiative will go towards lifting people out of tax altogether. I understand why the policy is popular, and why it has been effective for some low-paid workers, but Ministers need to look carefully at whether this is now becoming a game of diminishing returns. Meanwhile, there is no other effective labour market strategy. There is no strategy on progression, for example, and there has been insufficient action on low pay, zero-hours contracts and part-time work.

The gender pay gap is also widening. The element that is totally missing from this Budget—and all previous Budgets and spending announcements from this Government—is a gender analysis. Their policies fail to recognise that child poverty is a product of maternal poverty. Mothers are usually the main carers of children, yet this Government’s policies are positively inimical to women. Universal credit is to be paid to one member of a household, which provides poor incentives for second earners to increase their pay. The marriage tax break will help only one in six families with children, with 84% of that benefit going to men. Meanwhile, child benefit, which is usually paid to women, has been frozen or removed, and the child tax credit uprating has been held back at 1%. Marriage tax breaks are no help whatever to lone parents, the majority of whom are women, and whose children face greatest risk of poverty. Lone parents are also now having to pay for the child maintenance to help to support their children.

Overall, the value of financial support for families with children is being eroded, compared with the minimum income needed for families to raise their children. This is beginning to create real desperation among those families. More and more parents are going without, in order to provide the basics for their kids.

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I was disappointed when I looked to the Budget today for a new approach. But a new approach is affordable and it can be done: we could redirect the ill-chosen marriage tax break to benefit low-paid families; we could do more to attack the basic living costs faced by families, and more to freeze energy prices and support low-income families with the cost of child care; we could rebalance the system to recognise the role of mothers as main carers of children, putting an emphasis on money paid to women in the tax and benefits system, and money paid to mothers which will be spent on their kids; we should look again at the structure of universal credit, and at its disincentives for lone parents and second earners to maximise their income from work; and we should look back to the helpful recommendations the previous Government received from Lisa Harker, which I believe were welcomed by all parties, to design employment support in Jobcentre Plus more effectively to recognise the particular parenting and caring needs of parents—that should also be done in the Work programme.

If those measures were undertaken, we would be on track to eradicate child poverty, to boost parental—especially maternal—employment and to end inequality gaps. I hope that Ministers will begin to re-examine the way in which they achieve a balance of measures that properly reach out to all families, particularly families with children. That has been sadly lacking from the Budget today.

6.31 pm

Simon Danczuk (Rochdale) (Lab): I am pleased to follow my hon. Friend the Member for Stretford and Urmston (Kate Green), who made an extremely good speech about how the Budget and the Chancellor’s actions have a direct impact on people—she discussed the social dimensions to this Government’s actions. I wish to concentrate on the economic aspects.

On Sunday, the Chancellor said that we need to tackle the long-term economic challenges facing the country, and I could not agree more. The problem is that he also said that we have “a balanced recovery”—I could not agree less. If we are serious about tackling the big problems in our economy, it is best to start by admitting what they are. The simple truth is that there is a huge imbalance in our economy between the north and the south, and that is one of the biggest challenges our country faces. The Chancellor came into office talking about rebalancing the economy, driven by what he called the “march of the makers”. But this Budget shows that this Chancellor is incapable of matching words with actions. Instead of the march of the makers, we have yet another championing of the capital; we have an economic policy that suits London but that does not suit the north of England.

To see that, we need look no further than tonight’s London Evening Standard, whose front page says it all: “Osborne’s Budget boost for London”. It talks about Barking Riverside housing, Brent Cross regeneration, the Ebbsfleet garden city and the air ambulance for London. I am not saying those things are not needed, but all that was in the Budget speech and it is all about the south-east and about London; there is nothing about the north—about Greater Manchester, Merseyside, Yorkshire or the north-east. That is the reality of it; there is no rebalancing of the economy.

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Let us just look at this Government’s record on rebalancing the economy. All of this Government’s major infrastructure projects have been based in London and the south-east. Weeks ago we even had trains from the Pennines being hauled down to Oxfordshire—that is the reality of it.

Neil Parish (Tiverton and Honiton) (Con) rose

Simon Danczuk: I will not give way. These trains were needed in the north to provide vital links between our cities. There is no better example to show where this Government stand and what their priorities are.

Let me give the House another example: the new homes bonus. According to the National Housing Federation, it has taken £104 million from councils in the north and given £342 million to councils in the south, stuffing money into the back pockets of well-off local authorities—that is the reality of it. The regional development fund was supposed to counter many of these issues by pumping regeneration money into the north of England, but even that has been a failure under this Government, with more than £2 billion of the £2.6 billion budget still lying in Government coffers—it has not even reached the targets it was supposed to reach.

Perhaps the worst example of this Government’s southern bias is the way that they have treated business rates. Delaying the revaluation of business rates was a cynical and calculated move designed only to insulate southern businesses from paying fair rates. That is the reality. We now have the ridiculous situation in which struggling retail centres, such as Rochdale high street, are effectively subsidising places such as Regent street in London where business is booming. It is outrageous, and business people in the north of England are quite rightly furious about it.

Yasmin Qureshi: Does my hon. Friend think that the reason for this unequal distribution of resources is that there are hardly any Conservative MPs in the north-east and the north-west?

Simon Danczuk: I appreciate the intervention. The reality is that the Government are writing off the north of England, because they know they will not have any success there in the forthcoming general election.

Neil Parish rose—

Simon Danczuk: Let me make a little progress. Out of the 25 worst performing retail centres in the country, 21 are in the north. Those are businesses desperately in need of help from the Government, but they are not getting it. The Chancellor did not even mention business rates in his Budget, except in relation to enterprise zones. The Government collect £26 billion in business rates, and nearly every business in the constituencies of Government Members raise them as an issue and yet the Chancellor could not be bothered to mention them. The impact of those rates on businesses in the north of England is even bigger. The simple truth is that the Chancellor has not got the will to reform business rates because he knows that powerful interests in the south will lose out. Instead, what we get are quick fixes, as my hon. Friend the Member for Chesterfield (Toby Perkins) pointed out, and some tinkering around the edges. That is typical of the Government’s approach to

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the economy. They talk about their long-term economic plan, but the reality is that they shy away from every major challenge.

The Chancellor is very proud of raising the income tax threshold, and it is something that I welcome, but when it comes to addressing the causes of low pay and investing in the vocational skills we need, he has nothing to offer. When it comes to energy, he would rather tinker with the carbon tax than show real leadership and reform the energy market. The Chancellor talks of tough decisions, but he only takes the tough decisions that hit the poor and voiceless, not the rich and powerful. For all the talk of a long-term economic plan, it is becoming increasingly apparent that the only date that concerns this Government is May 2015.

It is clear that this Budget fails to address the fundamental challenge of our unbalanced economy. This London-centric Government cannot be trusted to make the big decisions about the economy of the north. The time has come for more fiscal devolution for our northern cities, such as Greater Manchester, so that they can keep more of their own money and use it to unlock the economic potential that is being wasted by this Government. More than that, we need a Labour Government committed to rebalancing our economy and securing the long-term economic future of the country.

6.38 pm

Mr William Bain (Glasgow North East) (Lab): This is the Chancellor’s fifth Budget, the aim of which is to turn the focus of the Government towards the election, and given the events of recent days, that election must be the leadership election, which is drawing ever closer within the Conservative party. As Government Members return to their constituencies to prepare for Opposition next May, they will have many weeks and months to decide how they can explain to voters why this Government is the first since the 1870s to leave households worse off at the end of a Parliament than at the beginning. Rather than their taking to the airwaves to produce ideas to tackle the country’s growing trade deficit, or our deep problems with productivity, the principal topic of debate among Conservative Ministers is the surfeit of Etonians around the Cabinet table. Nothing demonstrates how out of touch and ill-equipped they are to comprehend, much less end, the historic cost of living crisis that has enveloped the country. We should make no mistake: this was a Budget by the few, of the few, and for the few.

Like a stage magician asking his audience to suspend their disbelief at his latest rope trick, the Chancellor attempted to persuade the country that the money that has disappeared from people’s bank accounts and pockets over the past four years was all an illusion, and it is still there after all. The partial use of information cannot conceal the real-life experiences of millions of ordinary people across the country. In my constituency, the median wage fell in real terms by 5% in the year to last April, and median incomes across the United Kingdom will not reach pre-crisis levels until 2018, according to the Resolution Foundation.

Neil Parish: It is the hon. Gentleman who is under an illusion, because he does not seem to remember the £150 billion deficit that we have managed to halve. Is it morally right that our children and grandchildren should labour under more and more debt? Do we not have to deal with that, as this Government have done?

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Mr Bain: I am grateful for the hon. Gentleman’s intervention, but I recall—it clearly was not an illusion—the promises made by the Chancellor and the Prime Minister that the deficit would be cleared under their successful economic plan in five years of this Parliament. The Chancellor told us today that we had to wait an extra four years to achieve that. The illusion is that the Chancellor and the Prime Minister should ever think that they could clear the deficit, given the fiscal policies that they have followed since 2010 and all the harm that that has caused to living standards.

According to OBR forecasts in June 2010, we should have had growth of 9.1% between then and the end of last year, but we have seen less than half of that—a paltry 3.8%. The Budget, like its four predecessors, has failed properly to address the key factors driving the longest slump in real wages since the 1870s. First, there has been a failure by the banking system to provide liquidity to businesses on the scale required to boost growth in the real economy. Secondly, there has been extraordinarily weak business investment by the standards of previous recoveries. Thirdly, there has been poor export performance, with continuing balance of payments deficits, despite sterling having devalued by a quarter since 2008. Fourthly, there has been declining productivity in seven of the past nine quarters, and fifthly, connected to that, there has been a surge in under-employment, affecting more than 1 million people, who cannot get the hours at work they need to compensate for the collapse in wages in real terms.

The Budget should have begun the work of shaping an economy in which we permanently earn our way to higher living standards. Instead, ordinary people are forced to dip deeper into their savings to pay the bills, or depend on house price inflation, which is set to rise to 9% by next year, to fuel rises in consumer spending.

Alison Seabeck (Plymouth, Moor View) (Lab): I apologise for arriving rather late for this debate. Does my hon. Friend share my concern that the figures used by the Chancellor to highlight what he described as a narrowing of inequalities were based around 2011, before all these dramatic changes, particularly to people’s benefits, had been made? I think that “disingenuous” is a permitted parliamentary word, so does he agree that that was disingenuous?

Mr Bain: My hon. Friend makes an important point, because there is no data available to the Government post-2012. To argue that the policies that they have followed over the whole four years have reduced inequality is not a fair comparison for the Chancellor to make.

Last year Britain had the fifth lowest level of investment as a proportion of GDP anywhere in the EU. Between 2010 and 2012, business investment was a meagre 3.7%, compared with the nearly 20% forecast by the OBR in June 2010. While investment lags at nearly a fifth below pre-crisis levels, by contrast, surpluses accumulated by large corporations are up by a staggering 7% over that period. The Government have failed to get investment into the real economy to promote the kinds of jobs that are needed to increase living standards.

It is also worth touching on the OBR’s verdict at this stage in the debate. The Chancellor said that the Budget would rebalance the economy, but the OBR says that net trade will contribute nothing to growth over the

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next five years. Our export share is to fall in each successive year to 2018. Despite the Chancellor’s welcome doubling of the investment allowance today, the OBR has said that that will not raise levels of investment in the economy and will have a negligible impact on growth. It is a damning verdict on the entirety of the Chancellor’s Budget.

The Budget should have begun to meet the challenge of the changes we need to see in the banks to make them serve society, not the other way around—a challenge left unmet by the Chancellor today. It contains no plans to create a further two challenger banks to break the monopoly of existing players in the retail banking sector; no intention to create a proper infrastructure bank to boost finance to businesses engaged in large capital investment projects; and no plans to create a system of regional lending banks to supply credit on a long-term basis to viable small companies in the way that the Sparkassen have done to great effect, in good times and in bad, in the post-war era in Germany.

Today’s Budget fails the test of fairness on many counts. We know that one of the biggest causes of the rise in family incomes over the past four decades has been the rising employment rate among women. Key to that is increasing the supply of affordable child care. The Budget does nothing to increase the supply of child care places. According to the Family and Childcare Trust, the costs of a nursery place for 25 hours a week for a child under the age of two has risen in Scotland by 26% since 2010, and for a child over the age of two it has risen by 31%. Where were the policies today to increase the supply of child care places? They were entirely absent from the Chancellor’s speech. Most of the benefits of the tax relief he proposed will go to couples in the top half of the income scale, while families with average incomes, such as those in my constituency, will get less than £10 extra a week. Barriers to work will remain for many women, and the long-term potential for economic growth and higher living standards will be left unrealised by the Budget.

The Budget also fails the tests of increasing supply in new housing and beginning the task of rebalancing our jobs market by creating new construction jobs to replace the 214,000 that have been lost during the downturn. It fails the test of justice for our young people by not having a jobs guarantee to remove the scourge of long-term unemployment. I met a young constituent in Stobhill in my constituency last Saturday night. His whole family—parents and grandparents—told me of the hurt they felt about his 18-month search for a job, which has been in vain. It is a moral scourge that affects not only the young person involved, but their family and the wider community. In my constituency there are 179 other young people like him, and there are tens of thousands more across the country. The Budget fails to improve work incentives for the lowest paid by reintroducing a 10p starting rate of tax. It fails to reveal how the Chancellor will make good his promise to reach a minimum wage of £7 an hour for the working poor by next October.

In conclusion, this should have been a Budget that reduced inequality, invested in new child care places, invested in science and innovation, dealt with our rising skills gap and reshaped our jobs market. It is clear that if Britain wants such a Budget, it cannot come from this coalition; it can come only from a change of Government, which is long overdue and set for next May.

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6.49 pm

Sheila Gilmore (Edinburgh East) (Lab): In June 2010, the Chancellor led his band of merry men, straw men and tin men on the yellow brick road towards his emerald city: the elimination of the deficit by 2015, the cutting of public sector net borrowing to £60 billion in this financial year—in fact, it will be £108 billion—and growth of about 2.5% every year during this Parliament. The trouble was that he fell off his yellow brick road fairly quickly and started wandering around in the wilderness of low growth and higher borrowing. Suddenly, after four years, he seems to have found himself back on his road, albeit not as far down it as he expected. Like all expeditionary leaders, he is quick to tell us that he always knew where he was, and where he was going, and that it was all part of his long-term plan, despite the fact that he has not gone as far as he expected.

Does all that matter? It does, for a number of reasons. We are being asked to believe that someone who gave us that fantasy journey can still give us something credible. It also matters very much to the people who had to accept the austerity measures that we were told were essential to get us down the road as quickly as possible. People have suffered, and to find out four years on that we have not actually made much progress is bitter gall for many.

What about the people left behind? The cost of living crisis is real. People’s real earnings have fallen. All the Treasury and Institute for Fiscal Studies figures show, slightly differently, that the people who have lost out most are those at the bottom and the top of the earnings scale. However, for someone to lose 5% when they are earning £3,000 or £4,000 a week is very different from losing 5% when earnings are £150 or £200 a week. The impact on everyday life in the latter case is far greater, because the issue is not about having to cut out a few little extra luxuries—perhaps not go out for a meal as often as one might otherwise have done—but about basic foodstuffs, heating the house and buying clothes for the children. It is not good enough to say that the situation is all right because the people at the very top have also seen an income drop, which makes it fair; in the real world, that is not fair.

The other group that the Budget has rather lost sight of is the unemployed. People often say that unemployment has dropped by such and such a percentage, but the number is still very high. In April to June 2010, 2.46 million people were unemployed; according to today’s figures, the number is 2.33 million. I make that only 130,000 fewer than in 2010. Unemployment, of course, went up between 2010 and now and has come down again, and that doubtless explains some of the percentage drops that people are talking about. However, 130,000 fewer unemployed people, although better than before, is quite marginal.

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What are we doing for the 2.3 million unemployed people? There are still 700,000 more people unemployed than before the recession. Where are the measures to get those people into work and to help the young people about whom my hon. Friend the Member for Rotherham (Sarah Champion) spoke so eloquently? There are very few such measures. Talking about percentages going up and down as if we have solved the problem is no answer to people struggling on very low incomes who, in many areas, cannot find jobs no matter how hard they try.

On the child care proposals, at least one Government Member made a lot of the fact that child care costs for those on universal credit are now to be met by up to 85%. We have now had, or will have had, at least five years of this Government cutting help with child care costs from 80% to 70% for people on tax credits—the predecessor of universal credit. So for each of these five years, those people will have found things much more difficult. It is not clear when families in this situation will even be on universal credit, given how that is going at the moment. Will this provision start when the tax relief starts, or will it start only when these families finally get on to universal credit, if that happens? We have not been told.

Moreover, the proposal is to be paid for not by people who are better-off but by another group of people on universal credit. We do not know which group of people because we have not yet been told; apparently, we will know in the autumn. The change will be financed entirely out of the universal credit budget, so some families with children on universal credit will get a little bit more, but somebody else is going to get a certain amount less.

We always make choices in policies, and that is why debates about matters such as raising the tax threshold are exceptionally important for all of us. The 5 million people who are already below the tax threshold will get nothing out of this move. Some 10% of the total cost, which has already been about £10 billion, goes towards lifting people out of tax; 15% of it goes to people on median earnings of up to £26,000; and three quarters of it goes to people earning above the median. That choice has been made, but it could have been made differently. The money could have been used, and could still be used, to help people on lower earnings. If we want to help low-earning families, there are a number of other measures that we might want to use, but we are not using them. This is a choice that the Government are making. Constantly portraying it as something that is there only to help low-earning families does a disservice to those families. They know the situation; they know that they do indeed have a cost of living crisis that is not being resolved by today’s Budget.

Ordered, That the debate be now adjourned.—(Mr Gyimah.)

Debate to be resumed tomorrow.

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Health Care (Gloucestershire)

Motion made, and Question proposed, That this House do now adjourn.—(Mr Gyimah.)

6.57 pm

Chris Skidmore (Kingswood) (Con): My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) and I have been calling for this debate for some time, so we are grateful for the opportunity to discuss health care provision in south Gloucestershire.

In 70 days’ time, the accident and emergency department at Frenchay hospital in south Gloucestershire will close its doors. The decision on this is not recent, as it was taken in 2005 under the Labour Government, who then refused to allow it to be referred to the independent reconfiguration panel, despite a 50,000-signature petition from local people. The decision to close the A and E was also voted through locally by Labour councillors against Conservative opposition. When my hon. Friend and I were elected to this place in 2010, we called a debate on the future of Frenchay hospital in which it was confirmed that contracts had already been signed under the Labour Government to close Frenchay’s A and E, making the decision irreversible. The downgrading of Frenchay will forever be Labour’s legacy to the people of south Gloucestershire. My hon. Friend will speak later about the hospital and the continuing uncertainty over the health care provision that will be based there.

For the first time, this Government allowed South Gloucestershire council’s health scrutiny panel to refer recent decisions by health care managers temporarily to relocate beds to Southmead hospital while the final provision of beds at Frenchay was investigated by the independent reconfiguration panel—something that the previous Government resolutely refused to do. As local MPs, we submitted our own statements in support of Frenchay to the IRP along with local campaigners, and they are listed in the report’s appendix, yet we were surprised to see that no statements of support were made by the local Labour party or by its candidates.

The publication of the IRP report on Frenchay this week highlights—