The shadow Chancellor put forward the idea of a youth guarantee. The problem that that presents is this: how can a job be guaranteed other than through the public sector? Of course guaranteeing a public sector job takes people off the dole, but it also creates a permanent need for subsidy and support. What we have done is create a route that allows people who are not

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going into full-time higher education to develop the preconditions for proper apprenticeships through traineeships, basic academic requirements and work experience, and then find their way into true apprenticeship training, which has been an enormous success: it has doubled since we came to office. The measures announced in the Budget statement yesterday will enable a further 100,000 people under 24 to be given apprenticeship training, and the quality improvements that we have made are driving up demand and supply at the same time. This is a much better way of dealing with young people who are out of work than creating artificial jobs.

Mr Geoffrey Robinson (Coventry North West) (Lab): Many Labour Members are very pleased about the improvement in the employment situation that has taken place over the last six months or so—indeed, over the last year or so. However, is not the big issue—apart from the caveats relating to short-time working and zero-hours contracts—the fact that the productive capacity of the economy seems to have shrunk, and productivity per worker has certainly shrunk? That is casting a very grave shadow over the length of the recovery that we might have expected. What are the Government planning to do about it?

Vince Cable: The hon. Gentleman’s analysis is spot on. Of course that is what has happened. We have managed to avoid mass unemployment, but the average productivity level has fallen. If we are to grow, and if living standards are to grow—that seems to be the focus of the debate—productivity must rise, which prompts the question of how we do it. We are currently doing it in an environment that is severely constrained. We must remember—and I think that the shadow Chancellor often forgets this—that one of the massive legacies of the crisis was the structural deficit. A deficit of that kind does not go away when growth increases; it is there, it is structural, and it will have to be dealt with. The structural deficit, defined as we defined it when we formed the coalition, has fallen from about 5.4% of GDP to 2.7%. We are nearly halfway, but we have to continue the job, and the next Government will have to continue the job. In that context, we must proceed with an agenda of raising productivity and growth.

Stephen Timms (East Ham) (Lab): Does the Secretary of State acknowledge that a particularly serious problem is long-term unemployment among both young and older people, which, according to the figures released yesterday, has increased? Does not more need to be done to tackle that problem?

Vince Cable: It does, but the figures produced over the last year suggest that long-term unemployment is falling, along with unemployment in general.

Sir Edward Leigh: My right hon. Friend is making an excellent speech in favour of hard work. I read in the papers yesterday—so it cannot possibly be true—that the Chief Secretary had boasted that he had personally vetoed any indexing of relief for higher-rate taxpayers. Surely my right hon. Friend, who is pro-enterprise, cannot think it right that a police sergeant is paying higher-rate tax.

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Vince Cable: I listened carefully to what was said, and I thought that there was an acknowledgement of the position of the people on the top-rate threshold. This is a modest increase, but there is a recognition that marginal rates of tax are beginning to bite on middle earners, and I think that that issue is now being addressed.

Mr Ellwood: My right hon. Friend has alluded to the important point that the figures for long-term youth unemployment—which was mentioned by the shadow Chancellor—include young people who are engaged in full-time study. Perhaps he will join me in congratulating Bournemouth, where Arts University Bournemouth, Bournemouth university and the Bournemouth and Poole college have doubled in size. Because of that, the figures suggest that long-term youth unemployment has indeed increased, which is not the case.

Vince Cable: I believe that about a third of the total number who are classified as “youth unemployed” are, in fact, engaged in full-time study. One of the big changes for which the coalition Government should take credit is the continued expansion in higher education: despite all the doomsday predictions from Opposition Members about the radical higher education reforms, the number of people going into higher education, particularly those from disadvantaged backgrounds, has risen.

Neil Carmichael (Stroud) (Con): Does the Secretary of State agree that the issue of our productivity is linked directly to skills? Is it not rather ironic that the shadow Chancellor, who was Secretary of State for Children, Schools and Families, signally failed to help the nation to secure the right degree of skills—unlike us, with our long-term economic plan?

Vince Cable: Yes, indeed. I think that the apprenticeship model which we are now developing and expanding rapidly, in terms of both quality and quantity, is the remedy for the long-standing neglect to which my hon. Friend has rightly drawn attention.

Mr Robert Syms (Poole) (Con): Is it not a fact that the British car industry will produce 1.6 million cars this year, and that Jaguar Land Rover alone will export 13.5 billion? Is it not also true that the Budget, with its help for manufacturing and exporters, is bound to help such industries and produce a good British success story?

Vince Cable: I had intended to say something about manufacturing incentives, but let me now emphasise a point that my hon. Friend has made very well. Some of our manufacturing industries, including the car industry, are expanding rapidly, and showing very high productivity and rapid export growth. The aerospace industry is another example. I was delighted to learn this morning that Hitachi, the leading Japanese company, is to establish the global headquarters of its railway manufacturing business in the United Kingdom on the basis of its existing investment in the north-east of England, and it is expanding and seeking business opportunities from the rail revolution that is taking place here. Manufacturing industries such as those, which were previously in decline, are now beginning to become resurgent in some key sectors.

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Mr Andrew Love (Edmonton) (Lab/Co-op): Will the Secretary of State give way?

Vince Cable: I will take one more intervention, but then I must press on.

Mr Love: Is the Secretary of State confident about the sustainability of the recovery, based as it is almost entirely on consumer expenditure at a time when living standards are declining?

Vince Cable: That is not actually true. All recoveries tend to start with consumer spending, but lack of investment is a deep-rooted problem in the United Kingdom, and it is a problem with which we are trying to deal. However, if the hon. Gentleman studies the figures from the Office for Budget Responsibility, he will see that business investment increased by 7% last year, and the CBI projections for this year are higher than that. Business investment is beginning to take serious shape.

I think that, when we speak of growth, recovery and productivity, it is worth our while reflecting on some of the 18 Budget statements to which I have listened and responded in the past. For more than a decade, Budgets were introduced by the present Opposition, and there was a very positive story every year until we reached 2008. We had 2% growth, and there was enormous triumphalist cheering about the wonders of the brilliant Government economic policy that had produced that achievement. Comparisons were made with the past which suggested that this was the greatest economic performance, if not since the Victorians, probably since the Georgians, the Tudors or even the Romans. However, we had to go back to the Greeks to find the word that captured the spirit of those early Budgets. It was the word “hubris”, which encapsulated the Opposition’s simple inability to understand that weaknesses were building up during that growth.

Our Government are confident that we now have recovery. We are positive about it, and proud of our contribution to it. However, we acknowledge that there are some deep-seated historical weaknesses that now need to be addressed, and the Chancellor did address them in a systematic way in the Budget yesterday. The first and most important way of dealing with those weaknesses—and the driver of productivity—is, of course, higher levels of investment. That is why the extension of investment allowances, which will substantially increase the incentives for small and medium-sized companies, particularly those in the manufacturing sector—over time and in terms of scale—is such a big step forward, and is so welcome.

Gavin Shuker (Luton South) (Lab/Co-op): The Business Secretary is clearly confident that he could have run the economy better than Labour during the 13 years during which it was in power, and I suspect that that enthusiasm and confidence have continued into the present Parliament. Perhaps the right hon. Gentleman could outline some of the ways in which the economy would be run differently if he, rather than the right hon. Member for Tatton (Mr Osborne), were Chancellor.

Vince Cable: I find that many of my ideas have been incorporated in Government policy, and I am very pleased about the progress that we are making in that respect.

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Of course, increased investment depends on business confidence. Because we are approaching the election season, a danger is posed by some of the comments being made by the Opposition. Sir George Cox, who used to be at the Institute of Directors and is now an adviser to the Opposition, suggested recently that the business-averse policies of the shadow Chancellor and his leader were doing serious damage not to their own credibility, but to confidence in the country. I would underline that. If we have policies that appear to commit future Governments to energy price freezes that prevent new energy investment, we are undermining investment. Of course it is not just the Opposition; the people who want to take Britain out of the European Union and want to take Scotland out of Britain are also undermining investment confidence. Political certainty requires at least literate policies from the Opposition, which in the area of price freezes certainly is not the case.

Seema Malhotra (Feltham and Heston) (Lab/Co-op): I think the Secretary of State will know that that is not an accurate representation of what was said. May I ask him to comment on net lending particularly to small businesses, which is a concern? Why does he think that has continued to fall on his watch, and what is going to be done about it?

Vince Cable: Yes, there has been a continuing decline in net lending to small business. We think it is bottoming out, but it has happened and it is damaging. It is a consequence of the near-collapse of the banking system and the fact that some banks are now responding to much tougher regulation by being much more conservative in their lending. That is not true in all cases: Lloyds and Santander are increasing their net lending to small businesses, but many are not.

In response, the Government are establishing institutions, particularly the business bank, which are developing new flows and types of finance—internet-based lending, asset-based finance, invoice finance—in areas that hitherto were deficient, as well as supporting the establishment of new banks. About 20 new banks have been licensed over the last year, and that deals with the issue of bank competition that should have been dealt with when the last Government were in power and we had the Cruickshank report. That is now happening, however, and I therefore think we will begin to see the net lending trend becoming much more positive, but there is no underestimating the enormous damage that was done to the British economy as a result of the collapse of the banks, over which the last Government had responsibility for many years yet did absolutely nothing.

Mr Love: The biggest lender to small businesses is Royal Bank of Scotland, which has had particular difficulty in re-energising itself. What discussions is the Secretary of State having with RBS to try to get it to increase the level of net lending to small businesses?

Vince Cable: The hon. Gentleman is right: compared with other institutions, RBS is particularly remiss in its lending policies, and that relates to the seriousness of its balance-sheet position and its failed attempt to become a big global bank. I meet the chief executive from time to time and I think he is trying to change the culture of the bank in a positive way, and move it in the direction of some of the other banks, such as Lloyds, which have already achieved that transformation.

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The first priority has been to develop business investment and the Chancellor’s initiatives help with that. The second, and extremely important, priority, which has already been hinted at in interventions by Government Members, is in relation to manufacturing industry. It is important to take stock of the context here. We have had a catastrophic decline in manufacturing industry over a long period of time. Some of that is driven by technology and some of it is driven by international trade over which we have relatively little control, but certainly in the period after 1997 we saw the share of the British economy accounted for by manufacturing shrink from 20% to 10%, a decline that was even more rapid than in the mid-1980s, when policies were considered to be unfriendly to manufacturing. We lost 1.6 million jobs in that period.

Tom Blenkinsop: The Secretary of State will be aware that the work force at the Redcar steel plant in Teesside fell from 25,000 to 5,000 between 1987 and 1992, with several on-site plants being closed, but what is different now is the carbon price floor. Would the Secretary of State like to take credit for the Chancellor’s policy on that, which this Government brought in and which has led to the closure of Alcan in Northumberland and has put severe pressure on the steel industry in particular? In this context, will he bring the programme forward by two years so we do not have to wait another two years?

Vince Cable: The hon. Gentleman has anticipated the point I was about to make. One of the really positive announcements the Chancellor made yesterday recognises the difficulties facing the energy-intensive industries. I am aware that the Alcan smelter closed. I was there; I talked to the management about it and they acknowledged that although energy prices in the UK were one factor in their decision, it was by no means the only one. However, our energy-intensive industries are crucially important and it is not clever for them to close and migrate overseas, as we then simply get carbon leakage and do not do anything to improve the environment. It is therefore very important that they are protected from the increased costs that result from green taxation. The interventions the Chancellor made yesterday, which are very radical and meet the concerns of the industry, primarily centre on the renewables obligations and the feed-in tariffs and giving the industry effective compensation for those costs. I shall now be pursuing that with the European Commission, trying to ensure we get state aid clearance. The feedback we have had this morning from the engineering employers and other manufacturers suggests they are satisfied that the Government have taken a radical step that overwhelmingly meets their concerns.

Richard Graham (Gloucester) (Con): The Secretary of State is making powerful points about the importance of supporting manufacturing. Under the last Government, the city of Gloucester lost 6,000 jobs. We have created 2,500 jobs since this Government came in, quadrupled the number of apprenticeships and seen manufacturing increase in a way that has not happened for about 30 years. Does the Secretary of State agree that the Opposition simply do not understand what manufacturing needs, and that the doubling of the capital allowance is a huge step forward?

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Vince Cable: That is right, and the industrial strategy we are following across government gives particular priority to the aerospace industry, and I know my hon. Friend’s part of the country has benefited considerably from the development of the aerospace supply chain.

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): The Secretary of State touched on the compensation scheme announced yesterday. For the sake of clarity, will he inform the House how much of the compensation scheme announced in November 2011 and which was due to come in in April 2013 has so far been paid to energy-intensive industries?

Vince Cable: The element that relates to the European emissions trading scheme has already been paid. The companies have already received the cheque. The sums are not large because the ETS scheme proved to be pretty ineffective, but none the less the compensation is being paid and it is now being extended to a wider range of costs. [Interruption.] The hon. Gentleman seems to be indignant, but I think he should talk to his local manufacturers who have expressed full satisfaction with what we are doing.

Chris Kelly (Dudley South) (Con): The Secretary of State is talking about energy-intensive industry and there is still a great deal of that in my constituency. Does he agree we do not want these industries going offshore where environmental legislation may not be as stringently enforced as it is in the UK? We need to keep those industries here in the UK, and yesterday’s Budget helps us to achieve that. [Interruption.]

Madam Deputy Speaker (Mrs Eleanor Laing): Order. Before the Secretary of State answers the intervention, I should say that there are far too many conversations on the Back Benches. The House is getting restless. If the House does not calm down and let the Secretary of State get on with it, he will never come to the end of his speech.

Vince Cable: I am trying very hard, Madam Deputy Speaker, to take as many interventions as Members wish to throw at me.

In relation to Dudley and manufacturing, my hon. Friend is right that it is not sensible to lose manufacturing overseas as we will get carbon leakage and lose the production and the jobs. It is very much in our interests to stop that happening and we are doing so. There is a lot of evidence of the reshoring of production, including to the industries in the west midlands to which my hon. Friend refers.

The priority the Chancellor has given to manufacturing, to investment and the savings that lie behind investment, and to exports through the expansion of export credit are absolutely appropriate to getting long-term growth and the productivity that that entails. There is a lot more to be done. We still have serious constraints in terms of skilled labour. There are still problems in opening up business finance. We have to invest much more in science and innovation, although we are doing that. However, the themes that run through yesterday’s Budget of support for investment, for savings and for exports are absolutely right and they will take this country to the right place.

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Several hon. Members rose

Madam Deputy Speaker (Mrs Eleanor Laing): Order. It will be obvious to the House that a great many Members wish to speak and there is very limited time available. I must therefore impose a formal time-limit of five minutes per speech. I appreciate that if Members take interventions—which of course is necessary in a lively debate—that five minutes is likely to grow to seven minutes, but if Members wish to be courteous to fellow Members, as I hope they will, they will remain within the five minute limit.

2.30 pm

Stephen Timms (East Ham) (Lab): At the start of his speech yesterday the Chancellor drew attention, naturally enough, to the fall in unemployment announced yesterday morning. That is unequivocally good news, but it has been a very long time coming. We were told after the general election that the new Government’s policies would lead to steady growth and falling unemployment. In fact, for three years there was hardly any growth, unemployment remained high, and only now are we finally starting to see unemployment coming down.

That three-year delay has meant that the promise to eliminate the deficit within this Parliament will not be delivered either, and an important part of the legacy of that three-year failure will be in the labour market. Because the economy did not grow for three years, a large number of people are now long-term unemployed, and those long-term unemployed will not be the ones who move into the new jobs finally now being created. The long-term unemployed face much higher barriers to getting into work than others.

A striking detail in the labour market statistics yesterday, which I mentioned in my intervention on the Secretary of State, is that the number of people out of work long term—more than two years—went up. In his response a moment ago, the Secretary of State said that overall, long-term unemployment is coming down. In fact, it went up yesterday to exactly the same figure as a year ago, namely 450,000. That is the central challenge for labour market policy in the next few years: how do we bring people who have been out of work for a long time, and who have the biggest barriers to contend with, into productive employment?

Lyn Brown (West Ham) (Lab): We have noticed the thirst for work in the job fairs that we hold collectively in our constituencies. Does my right hon. Friend agree that the Government are simply not meeting that thirst for work?

Stephen Timms: My hon. Friend is absolutely right. There is huge enthusiasm for getting back into work in our area and across the country. It is absolutely clear that the answer to long-term unemployment is not the Work programme. The Chancellor rightly identified in his spending review statement last summer that it falls into the category of “underperforming programmes” in the Department for Work and Pensions. Figures today show that the Work programme’s performance has got worse.

I want to talk about the compulsory jobs guarantee, which my right hon. Friend the Member for Morley and Outwood (Ed Balls) has referred to and which he

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and the leader of our party set out at the beginning of last week. The proposition is for every young person who has been out of work for more than a year, and every older unemployed person who has been out of work for more than two years, to be guaranteed the offer of a choice of jobs. In some cases, a training place will be one of those offers. The jobs will consist of at least 25 hours a week for at least six months, and will pay at least the national minimum wage. The way in which we will deliver the guarantee, as in the future jobs fund before the election, is that the Government will pay the wages.

A fortnight ago, the shadow Secretary of State for Work and Pensions and I visited a software company in Cardiff, which employs 150 people. The company is growing fast and things are going well. It recruited 12 young people under the jobs growth Wales programme, which works on the basis that I have described. The Secretary of State commented in the House a few weeks ago on the fact that labour market performance was better in Wales compared with the rest of the UK. He is right, and jobs growth Wales is an important part of the reason for that. The company that my hon. Friend and I visited told us that it would never have been able to take the risk of taking on those 12 young people had it not been for the support of jobs growth Wales. That is why the Federation of Small Businesses in Wales is a champion of the programme. The subsidy for those 12 young people is long since finished, and they have been in their jobs for a year or so. Of the 12 young people who were taken on, 11 are now in permanent jobs with that company. The twelfth was not kept on by that company but has a job in a different company not far away. That is the kind of success that we can deliver with the approach that we are describing. We want to see the job guarantee delivering right across the country.

What a contrast that is to the wage subsidies under the Government’s youth contract, which has been a complete damp squib. We are about 60% of the way through the three-year programme, and only 7% of the budget has been taken up. More than 900,000 young people—nearly 20% of young people—are still out of work. We must do a great deal better than that.

On Wednesday evening, at the invitation of Colin Crooks, the social entrepreneur in residence at the London borough of Lambeth, I attended a reception at Brixton East for a couple of dozen start-up enterprises in Lambeth that were being mentored, with support provided by the Department for Business, Innovation and Skills, by Tree Shepherd, the organisation that Colin leads. It was a great evening with a tremendous buzz as imaginative and creative people presented their products, food, crafts and fashion. There are now opportunities for people to take the risk of starting up new enterprises. The Government must get behind them and support them particularly at the key moment when they take on their first employee. That is one of the key things that our guarantee will do, and I urge the Secretary of State to support it.

2.36 pm

Mr Douglas Carswell (Clacton) (Con): It made a pleasant change to listen to a Budget that had not been pre-announced in the previous day’s newspapers. That is as it should be, and it is a welcome change from what went on in the past, when details were leaked and briefed beforehand.

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Parts of the Budget are absolutely magnificent, and I am particularly pleased about the decision to raise the income tax threshold. Many of my constituents are on relatively low incomes. Before 2010, people paid income tax after the first £6,500 of income, but now they will pay it only after the first £10,500. It is absolutely right that people be allowed to keep more of the money that they earn. It is absolutely fair to have this tax break—it is a tax break for everyone—and it does the right thing by incentivising work. It helps to end the crazy situation that has been engineered whereby the state takes tax from families with one hand and gives handouts with the other—a bizarre situation that got vastly worse between the years 2001 and 2010.

Alex Cunningham (Stockton North) (Lab): The hon. Gentleman talks about the £10,500 limit, but will he spare a thought for the thousands of workers on Teesside, and millions more across the country, who do not earn anywhere near £10,500? They are seeing a rise in the cost of living, energy bills and everything else, and they are not benefiting at all from the Budget. Has he got something to say to them?

Mr Carswell: I would love to cut tax right across the board on a whole range of things, which would help people in that situation. The reduction in income tax for people on relatively low incomes will undoubtedly be welcomed.

I am also thrilled and delighted—it warmed the cockles of my free-market heart—to hear about tax breaks for savers. With interest rates having been so low for so long, it has been a pretty torrid time for savers. The raising of the personal tax-free savings allowance is fantastic news. So, too, is the removal of the artificial distinction between different types of ISAs. The more we can encourage people to save, the better. One person’s deferred consumption and saving is somebody else’s loan or credit.

I cheered, too, when I heard about giving folk flexibility as to how they use their pension pot. The implications of that are potentially profound and radical. It could mean that pension pots no longer die with people. It could mean that they become a vehicle for passing wealth down the generations. The implications are potentially huge and welcome.

Neil Parish (Tiverton and Honiton) (Con): My hon. Friend is making a powerful speech. I agree with him that it is absolutely right to allow people to have their own pensions and spend their own money. Will the changes not also deliver better annuities for those who want to buy them, by introducing more competition into the financial services sector?

Mr Carswell: My hon. Friend is absolutely right. The need to buy an annuity was something that troubled a lot of my constituents, and I am pleased about this change. The fact that the Government are no longer going to presume, rather paternalistically, that they know best how folk should manage their pension pots will have big implications, and we need to reflect on them. The change will have big implications, not least for the people who will now be taking steps to plan for their own financial security.

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I was encouraged to hear the Chancellor talking about energy costs. He was absolutely right to say that the low energy revolution was helping to re-industrialise the United States, and that that could happen here too. However, rather than simply reining in the worst excesses of the carbon price fixing scheme and other corporatist market-rigging systems, I would like us to abolish some of those schemes entirely.

I was slightly less enthusiastic about one or two aspects of the Budget, and I shall talk about those now—albeit briefly, those on my Front Bench will be delighted to hear. First, I am concerned that the Budget is fiscally neutral. We have relied for the past few years on cutting the deficit by increasing spending in cash terms and hoping that tax receipts will rise faster. I do not think that that is the best way to do it. We need to take a slightly more robust approach. As a result of the approach that we have taken, the deficit has fallen from 11% in 2010 to approximately 5%, which is good, but we said in 2010 that we would close the gap within four or five years. We are still saying that today. It means that we are still borrowing more than £100 billion a year—money that we do not have. That will have enormous consequences when this cheap money merry-go-round comes to an end and interest rates rise.

I am also baffled that the Opposition are unable to ask the obvious questions about this. Perhaps that is because they have no coherent alternative, or because their policy is simply to borrow more. However, as someone who occasionally opposes his Government on certain things, I find it extraordinary that the party whose job it is to ask the awkward questions seems to be unable even to understand the questions.

I am delighted that the Government are taking action to encourage exports, but I am not absolutely convinced that giving cheap credit to exporters is the only way to do it. I wonder whether this country’s relatively poor export and productivity performance over the past decade is partly a consequence of malinvestment, and whether that in itself is a consequence of cheap credit. Perhaps we need to flush out malinvestment and remove what is, in effect, the cholesterol in our economic arteries. Cheap credit can boost exports, just as it can boost the housing market in the short term, but I wonder whether it can have those effects in the longer term.

I shall spend the minute I have left making a wider point about economic output. It will soon exceed the pre-crash peak, which is wonderful news. The revision of output to 2.7% is impressive, but I ask the House to bear two things in mind. I say this in a spirit of non-partisanship. First, we are seeing a massive fiscal stimulus in this country, even though we do not call it that. We do not call it a massive Keynesian fiscal stimulus; we all prefer to pretend that it is not happening. By definition, however, if we spend £100 billion more each year than we take in tax, that is a Keynesian fiscal stimulus, and it is happening on a vast scale.

At the same time, we are having a massive monetary stimulus, with record low interest rates, cheap credit and quantitative easing. Without question, fiscal and monetary stimulus will raise output. I want to ask whether that is sustainable. I am genuinely baffled—I say this frankly and honestly—as to why the Opposition are unable even to ask these questions. Overall, I think

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this is a good Budget and it is to be welcomed, but I am genuinely surprised by the response of the party opposite.

2.44 pm

Ms Karen Buck (Westminster North) (Lab): This is a budget that does little or, in many cases, nothing for the millions in the lowest income groups in this country. Unsurprisingly, the chief executive of the Joseph Rowntree Foundation has said:

“This is a Budget for the people who already have, not the people who need to benefit most from the return to growth.”

It is a lost opportunity to help the 13 million people on low incomes, who are unlikely to see any benefit from these measures. That assessment fits in with the analysis of the Institute for Fiscal Studies, which shows that more than 300,000 children will be pushed back into absolute poverty over the course of this Government and that, on present trends, 900,000 children will be returned to relative poverty by 2020. That will undo everything that the last Labour Government did to tackle poverty. The Budget sets a cap on overall social security spending while doing little or nothing to tackle the drivers of rising social security spending, especially among working people who are being squeezed by rising housing costs.

I want to talk about two policy areas that lie behind these failures. As we have heard, households have suffered the longest period of falling living standards and squeezed wages since the 1850s. We have had 50 consecutive months of a wage squeeze below inflation. I came into politics because I was driven by concerns about unemployment, and the growth in job numbers is undoubtedly good news, but it would be completely wrong to see the growth that has been achieved in recent months as an unalloyed success story. Among other things, one third of a million families are now working fewer hours than they want, with more people being forced into part-time employment. The latest job figures show 211,000 people entering self-employment, which represents a large proportion of the recent jobs growth. Self-employment is undoubtedly a good thing for many people, but one problem is that it is strongly associated with low pay. Low pay is part of the crisis that is underpinning the fall in living standards.

Alex Cunningham: My hon. Friend has quoted one organisation; let me quote another. Gillian Guy of Citizens Advice has said:

“The chancellor talked about making, doing and saving. This budget needs to work for those who are making do and can’t save”.

Are those the people that my hon. Friend is talking about?

Ms Buck: I am talking about the 13 million people on very low incomes, many of whom have incomes that are so low that they will not benefit from the change in the income tax threshold, welcome though that is. It will do nothing for the people whose earnings are already below it.

There are 5 million workers on low pay in the UK—one in five of the work force. That is one of the highest proportions in the developed world. The academic consensus shows clearly that the minimum wage, although fiercely and wrongly opposed by the Conservatives,

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boosted earnings without causing unemployment. It has all but abolished extreme low pay, but in recent years there has been an increasing spike in the number of workers on the minimum wage. The proportion of workers on the minimum wage has grown by nearly 60% in the past five years. Rather than being part of a continuous process of uprating the pay of those on low incomes, it is now becoming the going rate in many sectors. That is one of the causes of falling living standards for millions of people and of increased social security spending.

This is a particular challenge for London. Londoners did not benefit as much from the introduction of the national minimum wage as did people in many other parts of the country, because of the slightly higher wages. The trend towards more workers earning at or just above the level of the minimum wage has exacerbated the crisis in living standards in London.

As well as low pay, another challenge—and another driver of social security spending—is housing costs. It was interesting to see that yesterday’s report from the Office for Budget Responsibility stated:

“The largest driver of the rise in spending on housing benefit has been caseload growth in the private rented sector…The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth…almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”

The relationship between low pay—and a failure to uprate pay over a number of years—and rising housing costs is driving more and more people, particularly working people, into dependency on housing benefit.

None of us wants to see expenditure on keeping people unemployed or lining the pockets of private landlords by subsidising higher rents. We all want to see a fall in social security spending on these things, but while pay is low, while average living standards are not rising and while rents are rising, we are going to see more costs and expenditure in that area. But there is a solution. The Chancellor promised a rise in the national minimum wage to £7, but we saw a 17p increase. Many employers across the country could pay more than the national minimum wage and they should be encouraged to do so.

We will not see a cut in social security spending unless and until we reverse the calamitous fall in the building of social housing, which is the only safe and secure means of ensuring that low-income people have low housing costs. Combine those two things and we will see a major shift away from the social security spending, which we would like to see fall, into a rise in living standards for millions of people. This Budget has not been able to provide that.

2.50 pm

Chloe Smith (Norwich North) (Con): I hope that the House will excuse my slightly husky voice and cough, which I hope to get past in making my comments.

I welcome this Budget. The Chancellor is right to be focused on getting Britain to

“out-compete, out-smart and out-do the rest of the world.”—[Official Report, 19 March 2014; Vol. 577, c. 789.]

I, too, want the best for Britain and for Norwich in that sense. That kind of ambition is the only way to get economic security, and the single biggest risk to it

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would be to abandon the plan and listen to Labour’s calls to borrow more, spend more and put up taxes. That would, of course, land hardest of all on the next generation, who would only have to pay back those debts that Labour wants to dodge. This Budget is great news for businesses in Norwich. Those who are looking to invest and export will welcome measures to cut energy bills, to double the tax allowance for investing and to boost support for exporters. I know from my work in leading a project called Norwich for Jobs that businesses do want to invest and to grow. I hope this Budget will help them to do that and make the Norwich economy more resilient. I hope that that translates into more jobs locally, because that is one thing that economic security is all about. I also welcome the previously announced measure, coming into effect next month, of the employment allowance, which will particularly help small businesses.

I welcome the increase in the personal allowance, because it leaves more of people’s money in their pocket as they go out to work. It is worth up to £800 for more than 80,000 people in Norwich. I am a Conservative for that very reason: I believe that people are individual, responsible and free to spend their own money in line with their best decisions. I also support the Help to Buy scheme and running that for longer until 2020 could mean that many more families in Norwich get on the housing ladder. I strongly support the tax-free child care scheme that has been announced. Importantly, that scheme will particularly help basic rate taxpayers, who often find that the cost of child care outweighs the financial benefits of both parents working. It is important to give families greater stability and the flexibility to make their own choices. The Budget is also good news for pensioners, providing the flexibility and reward that has been discussed in this Chamber earlier today, and for the 24 million people who hold individual savings accounts.

Let me make two further constituency points before addressing a slightly more meaty topic. It is particularly good news for my constituency that the Chancellor is going to slash the tax on bingo by half. Mecca Bingo and all its employees and customers on Aylsham road in Norwich were celebrating that overnight. I also welcome the removal of VAT on fuel for air ambulances, as the East Anglian air ambulance has its headquarters in my constituency.

I wish to add my support for the nearly 12,000 workers in my constituency who are struggling in work on rates a little above the national minimum wage. The Chancellor has been right to call for a higher minimum wage, and I support that. This Budget statement has shown that the economy is recovering; jobs are up—1.3 million more people are in work now than there were in 2010. People are also looking to have more money in their pocket. On that point, I have dealt with the personal allowance. I mentioned my work on Norwich for Jobs, which helps to get young people into jobs and apprenticeships, and that helps more families get security, too. The project has helped nearly 600 18 to 24-year-olds in work over a year. We set ourselves the goal of halving Norwich’s youth unemployment in two years. We can see the effects directly in the employment figures, and I am sad only that the shadow Chancellor is not here to hear this. We set out to halve Norwich’s youth unemployment from 2,000 to 1,000. It has come down by 670 since we

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began the project, and every one of those figures is a young person taking home a pay packet and gaining experience. That is thanks to the local firms that have pledged to help them.

I give that example to show that firms want to employ great people, but it is also in the interests of a business to retain them, and paying the living wage can help to do that. As hon. Members will know, the living wage campaign asks for a voluntary commitment from employing organisations. Some would like Norwich to declare itself a living wage city. Norwich has demonstrated, through the firms that are pledged to Norwich for Jobs, that it is a city that cares. It is a city with a sense of pride. It will achieve things for its young people and for its strong industry.

Whether those same firms are all in the position of being able to pay more, as the living wage campaign asks, is for them to decide in respect of whether they can retain those jobs. Small firms are wary of being placed in an impossible competitive situation against larger firms that can absorb costs. The Federation of Small Businesses reports that more than two thirds of staff in an average small business are paid at or above the living wage already, but it believes that that should remain a voluntary decision for employers, and I support that view. My hon. Friend the Member for Hexham (Guy Opperman), a keen supporter of the living wage, has noted that there is a “lack of detailed analysis” behind it. The argument for the blanket rise does need more explanation. In broad terms, I support the campaign—I only wish I had more time to discuss it.

2.55 pm

Mr Geoffrey Robinson (Coventry North West) (Lab): It is a pleasure to follow the hon. Member for Norwich North (Chloe Smith) and my hon. Friend the Member for Westminster North (Ms Buck), both of whom spoke about the minimum wage and those on low wages. What the hon. Member for Norwich North forgot to say is that this Budget does absolutely nothing for the millions who are paying no tax at all, and that is our principal criticism of it.

Before I deal with that, may I just say a few words about the speech by the Secretary of State for Business, Innovation and Skills, who reminded us that he has seen 18 Budgets? I have seen nearly all of them with him and I remember many of his trenchant criticisms in the past, particularly in the first decade of this century. He seems, as the Tory party wishes to do, to have airbrushed out of his history—and certainly out of his memory—exactly what this Government’s so-called economic plan has achieved over the past four years. It is no good saying that the plan worked, because the plan did not work on any of the measures it set out to measure itself by.

Let us discuss these things one by one: we have had three and a half years of flatlining; we have had growth which has achieved less than 50% of the Government’s plan; we have had investment that is below 50% of what they set out to achieve; and on exports—exports investment was at the heart of the plan—they have achieved less than 50% of the plan, as Members well know. That is some plan, given what has happened on all the key indices.

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Mr Robin Walker (Worcester) (Con): Will the hon. Gentleman address the issue of 1.3 million private sector jobs created?

Mr Robinson: I will come to that in a moment, although the hon. Gentleman may have been here when I intervened on the Secretary of State on that precise point.

Let us examine the borrowing record, as borrowing should have been central to all this. Because we have been able to have more investment and more exports—capital investment and exports—we should have growth, which would reduce the borrowing. In fact, over the four-year period, with us now entering the five-year period, we are going to borrow nearly £200 billion—the figure is £190 billion—more than we projected. We were to reduce borrowing as a percentage of GDP, but even in the next two years—years 5 and 6—it is projected to go up as a percentage of GDP. As for balancing the budget, that has been pushed out by a further two years. This is not a plan that has succeeded; it is a plan that has failed in almost every respect.

There is one exception—the hon. Gentleman referred to it and I also challenged the Secretary of State precisely on it during his speech: the employment record, particularly in the private sector, is remarkably and surprisingly good. I do not want to get into how many jobs are part-time, zero-hours contracts and so on. The fact is that the labour market has shown itself to be much more retentive of labour and productive of labour than we expected. For anybody in this House or in the Government, or on any of the other projections indicated from any sector, the performance is quite encouraging, except in one crucial respect: it suggests that, given where output is relative to employment, we have suffered a dramatic loss—probably for the long term, for all we know—in the productive capacity of the economy and in the productivity of our labour force. Unless that can somehow be rebuilt—there is nothing at all in the Budget to address that point—we are in for a much longer and slower recovery than we could have achieved. That is a big disappointment. The Secretary of State analysed it willingly, but the Office for Budget Responsibility itself says, “There’s nothing here that’s going to make any difference to the forecast we made a year or so ago.”

In other words, we have done nothing and are proposing to do nothing, to address the central issue of the productive capacity of the economy, which would underpin, sustain and increase our recovery rather than hold it back. There is nothing in the Budget that will improve that. Of course there are a couple of measures that we welcome, including the increase in capital allowances. I never understood why they were cut in the first year. We viciously opposed it at the time. We also approve of the improvement in export financing. However, there again, the Chancellor and the Government have form on those issues. They introduced two similar export financing schemes, one of which was strangled at birth and the other helped just five firms. I hope the Government are serious this time. We do not want to see imaginative and quite substantial measures being choked off by the bureaucrats.

Neil Parish: The hon. Gentleman has been making many predictions. The shadow Chancellor said that our policies would mean 1 million fewer jobs, and yet we have created 1 million more jobs. Will he comment on that 2 million credibility gap?

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Mr Robinson: We are very pleased to see employment increasing. What the hon. Gentleman needs to understand is that there is a problem of productive capacity in the economy, and we have done nothing to address it. Labour was challenged to spell out its criticisms of the Budget. The central point is that we are opposing the Government by saying what they have not done. We are in a cost of living crisis—probably the worst that any of us will witness in our lifetimes—and yet the Government have done nothing to alleviate the position of the worst off in this country. That is our principal criticism of this Budget. The Government show no indication of wanting to address that matter, which is why we will oppose the motion when it comes to a vote. It is a pity because there is an opportunity for the Government now, with a relatively stable economy—our outlook is better now than before—to show that they can get their priorities right. It should not be just those on £150,000 a year or more who benefit, or those who can save £15,000 a year—some families have to live on £15,000 a year, let alone save it. The priorities are wrong. We welcome and support the boost to the manufacturing sector, and hope that it will be carried through.

3.2 pm

Mr David Heath (Somerton and Frome) (LD): In contrast to the economic amblyopia of the hon. Member for Coventry North West (Mr Robinson), I honestly believe that there are many things to welcome in this Budget. Chief among them is the greatly improved economic situation in which this country now finds itself. I must say that I had my doubts that we would achieve our employment objectives, but we have, and in full measure. Unemployment in my constituency is now at 1.6%, compared with 17% in the mid-1980s. That shows just how far we have gone. I am also enormously encouraged by the 1.5 million new apprenticeships that have been put in place by this Government, because that seems to be at the core of our economic recovery.

There is a strange process in this House by which the Budget is separated from the autumn statement, which is not entirely logical. I find it difficult to talk about the money-raising capacity of the Government without mentioning where that money will be spent. May I give due notice that when we come to the autumn statement, I will expect to see clear commitments to flood alleviation schemes, such as the sluice on the River Parrett, and the long-term changes for sustainable maintenance of our flood systems. I will expect to see the A303 explicitly mentioned as part of the capital programme. I will also expect to see the long-promised improvements in our rail infrastructure in the west country, including the opening of Somerton and Langport stations, which will offer long-term economic benefits to our area.

Let me deal with what is in Budget. I wholeheartedly welcome the increase in the tax threshold, which is a commitment that I made before the election. Not only does that take millions of people out of tax altogether, but it represents, by 2015, an £800 tax cut for people on modest incomes in my constituency and across the country. That is enormously important. From a parochial point of view, I would have welcomed the freeze in cider tax, except that I felt it was slightly undermined by the cut in beer duty, and I felt that perhaps cider drinkers did not have parity with beer drinkers. None the less, the freeze is welcome.

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I welcome the changes announced by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). We have campaigned for many years for this straitjacket of the annuity-buying system to be released.

I welcome the industrial strategy that the Business Secretary has developed over recent years. I am talking about the encouragement to invest and the support for exports. One sector in which I have had direct involvement is the food and drink sector. That is the biggest manufacturing industry in this country, with a £90 billion turnover and 400,000 workers engaged in it. Exports form a key part of the sector, providing £9.3 billion, which is a 5% increase year on year. None the less, we still have far more to do. There are still many opportunities that need to be realised. The fact that 90% of small and medium-sized enterprises that produce food and drink still do not export suggests that we need to do an awful lot more in the way of encouragement.

Paul Burstow (Sutton and Cheam) (LD): My hon. Friend is absolutely right that investment and exporting are key to our growth. Does he therefore welcome the other announcement that was made yesterday, which is the doubling of the tax allowance when it comes to capital investment, from £250,000 to £500,000?

Mr Heath: Absolutely. We are getting an industrial strategy that makes sense for this country. The point was made that we need to offer direct encouragement to firms to export, but what is lacking is aspiration. What we need to do is increase the level of aspiration of many of our smaller firms.

There has been mention of the national minimum wage and the difficulties caused by not uprating it. May I remind the House that there are still abusive employers who do not even pay the national minimum wage and who are not investigated and prosecuted? There are also many abusive contractual relationships, especially in some sectors. That is not to damn every employer in those sectors; a lot of them are very good and conscientious employers. However, it worries me that in the catering and entertainment, care and construction sectors there are still bad employers who need to be brought to book. We already have a model to deal with them. It has been shown to be successful and I used to use it when I worked with the Gangmasters Licensing Authority. I do not believe that the GLA can simply expand into other sectors; that would be beyond its capacity. It also runs the risk of breaking an organisation that is doing a very good job in its sector. We need to replicate that in the other sectors because, for me, avoiding abusive relationships between employers and employees is one of the key issues that remains. Some of the virtually indentured labour that goes on is linked to our work on modern-day slavery. I believe that the Government can and should take action to end it once and for all.

3.8 pm

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): First, I want to discuss the effects of the Budget on the steel industry. I welcome the news that the Government have announced their intention to introduce relief against the rapidly rising costs of carbon levies, and the mitigation of the renewables obligation is a particularly good step forward. As chair of the all-party group on steel and metal related industry, I, along with

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colleagues from the group, trade unions and the steel industry, have been campaigning hard on that for a long time. Having said that, however, I do have some concerns. The compensation is still two financial years away and the steel industry will continue to face considerable challenges in the interim given that the international demand for steel is still at mid-financial crisis levels and is probably worsening. Will the Minister clarify whether state aid clearance will take those two years and is there any way that the Treasury can bring the compensation forward so that the steel sector and other foundation industries do not have to wait?

I remind the House that the carbon price floor, which hits UK manufacturing four times as hard as our EU competitors, was introduced by this Chancellor and this Government. That has led to a number of jobs being lost, particularly at the Tata Steel site in Newport where 200 jobs were highlighted for potential redundancy last week. We have also seen the loss of Alcan in Northumberland as well as other manufacturing sites in the foundation sector.

I am similarly cautious about the Government’s proposals to increase the personal allowance. Although on the face of it that is an attractive policy, I am wary as increasing the personal allowance for income tax will do nothing for the millions of low earners who earn less than the current personal allowance.

It has recently been reported in the press that the Chancellor is considering renaming national insurance in the run-up to a potential merger with income tax, so I am surprised that the Budget does nothing to address the anomaly faced by millions of people who earn less than the annualised primary threshold and still face a class 1 national insurance contribution liability. For example, despite earning less than the annualised primary threshold in 2012-13 some 3.48 million people had an average national insurance liability of £172 simply because of the distribution of their earnings across the year. The anomaly is caused by the fact that national insurance liability is calculated per pay period rather than annually. That is particularly problematic for the 583,000 people working on zero-hours contracts—a figure that has trebled since the general election—whose pay varies significantly week to week. I urge Ministers to revisit this subject in addition to considering raising the personal allowance, as it would be a positive step to take those very low earners out of an unpopular and regressive tax. I also want to see an update from the Chancellor on his 2011 proposal to merge national insurance and income tax.

I also have some concerns about the Government’s proposed changes to ISAs and the proposed introduction of a pensioners savings bond. I have tabled a number of written questions on these issues, but I hope that Ministers will be able to address them today. As many hon. Members have stated, increasing the ISA limit does little to help those who could not dream of saving £15,000 a year. I think that is a legitimate concern, but I am also somewhat concerned by the removal of the distinction between a cash ISA and a stocks and shares ISA. My fear is that it might nudge savers to move investments from stocks and shares ISAs, the contents of which often include the more speculative investments necessary to allow for innovation and growth, to low-yield

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cash ISAs. Although savers have differing personal risk appetites, it would be interesting to see what assessment the Treasury has made of the effects of ISA simplification on capital markets.

I am also concerned about the pensioners savings bond. Although of course we all want pensioners to get the best possible deal, I am curious about how, at a time of austerity and cuts, the Treasury can fiscally justify paying 4% annual interest on a three-year bond for pensioners when a three-year gilt yield is less than 1.2%. I am also curious about how the Chancellor feels that it is justifiable to offer the product only to those who are over 65 and not to younger hard-working families who might want access to such a market-beating preferential interest rate or who, for reasons such as early-retirement caused by workplace injury or other anomalies, might financially depend on income from savings. I have tabled questions to ask how the Government will account for that and whether they will consider the 4% annual interest they will pay on the debt under the debt interest headings they use in their analyses. Furthermore, has the Treasury considered whether it will crowd investment out of the private sector by offering such an interest rate when banks and building societies are offering, at best, a 2.7% fixed annual interest rate on three-year bonds? In previous Budgets from this Government, we have heard arguments about the public sector crowding out the private sector. I would like to see a Treasury assessment of how the policy might crowd out the private sector.

3.13 pm

Chris Kelly (Dudley South) (Con): I welcome the Budget statement. It is a Budget that will help us build a resilient economy and it is part of the Government’s long-term economic plan to put this country back on the path to sustained growth, a path that was deviated from by the Labour party with the debt-fuelled politics of the final decade of its time in office.

I commend my right hon. Friend the Chancellor who, since coming to office, has been proved right on all the big calls of the past four years. He correctly identified the problems and was right to set out a clear plan to address and then overcome them and equally right continually to stress that there was no alternative to plan A if Britain were to turn the corner. The deficit is down by a third, and in the coming year it will be down by a half. But it is still one of the highest in the world, so the Government are right to be taking action to bring it down further.

I will now deal with some of the detail of the Budget, but in the light of the number of Members who wish to speak, I will limit my remarks to three or four main areas. First, this was a Budget for savers. Social media has been awash with the hashtag #savingsupported, and with good reason. The reforms to individual savings accounts and raising the limit to £15,000 could benefit up to 513,000 ISA holders in the west midlands alone. Cutting the savings income tax to zero on up to £5,000 could benefit up to 131,000 savers in my region.

The Budget will help more of my constituents to save for a home, save for their retirement and save for their family. I welcome the additional support for savers, so that more people can provide a secure future for themselves and their families. Although we are getting on top of our debts as a nation, for many decades Britain has

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borrowed too much and saved too little. It is therefore right that hard-working people keep more of what they earn, and of what they save. Support for savers is, rightly, at the centre of the Budget.

The personal tax changes will also be widely welcomed in my area. The increase in the personal allowance in 2015-16 will lift 27,000 people out of income tax altogether, and 2,120,000 people will see an average real terms gain of £62. Again, these are west midlands numbers and the national figures are, of course, even more impressive.

The next area I want to deal with, after help for savers and cutting taxes, is the welcome news on pension flexibility, particularly with the fundamental reform of the taxation of defined contribution pensions. As the hon. Member for Somerton and Frome (Mr Heath) has just said, from April 2015, the Government will legislate to remove all remaining tax restrictions on how to access defined contribution pension pots, which means that no one will have buy an annuity if they do not want to. Those who still want the certainty of an annuity, as many will, will be able to shop around for the best deal. There will be no punitive 55% tax rate for those who take more than their tax-free lump sum. It will still be possible to take 25% of the pension pot tax free on retirement, but what is taken above the tax-free lump sum will be taxed at normal marginal rates, not 55%, as at the moment. We will have a new guarantee, enforced in law, that everyone who retires on a DC scheme will be offered free, impartial, face-to-face advice. As economist Ros Altmann summarised:

“No more annuity will be required. No 55% tax charge, only marginal rates. Everyone will get access to face-to-face advice to make the right choice for themselves and their family.”

As the Secretary of State for Business, Innovation and Skills said earlier, we now know that manufacturing halved under Labour, with all bets effectively being on the City of London, and look where that got us. Now manufacturing is growing again, and jobs are being created in Dudley and the black country, and across the country. Week in, week out, I visit businesses, often in manufacturing or engineering, or connected to those industries, and the optimism I am finding is reflected in the figures, with 1.7 million new private sector jobs having been created since May 2010. Investment and exports are also up. But we have 20 years of catching up to do, so the Government are right to be backing businesses that invest and export. With the help of the British people, the Government are turning the economy around. The reward is economic security for the families of Britain. The Budget is part of the long-term economic plan—a plan that is delivering economic security for families in my constituency and throughout the country.

3.18 pm

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): My first comments are about the nature of growth and the Chancellor’s triumphalist approach to the growing economy. Yes, it is growing, and that is welcome, but this is not economic growth led by sustainable increases in investment—that has been pretty stable during the last few years. It is not led by an increase in exports; again they have not reached anything like the level needed to get us out of recession. Rather it has been led by an increase in consumption and household debt, and by a housing-fuelled boom in London and the south-east.

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Of the job growth in the private sector, 80% has been created in London. That totally contradicts the Prime Minister’s assertion yesterday in Prime Minister’s questions when he claimed that it was the other way round. I checked with the Library to see whether my insight into this was incorrect, but it referred me to the Centre for Cities study, which clearly says that 80% was concentrated in London. I hope that the Minister can explain the apparent contradiction between the Prime Minister’s assertion and the best available evidence.

I would like to focus for a few moments on what I consider to be a huge potential black hole in the Budget projections. In the autumn statement—the hon. Member for Somerton and Frome (Mr Heath) commented on the connection between the autumn statement and the Budget—the Chancellor announced funding for an additional 60,000 higher education student places, funded by the sale of the student loan book. He said:

“The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential.”—[Official Report, 5 December 2013; Vol. 571, c. 1110.]

When the Minister for Universities and Science appeared before the Business, Innovation and Skills Committee, he was questioned about what appears to be an inherently risky way of funding a long-term commitment. He informed us that it would be fully funded irrespective of the sale of the student loan book. That is welcome, but it has not been factored into any OBR predictions I have seen. The cost could be as much as £12 billion. The Government’s own advisers, Rothschild, said that without sweeteners and some form of subsidy, only £2 billion might be reclaimed.

That leaves a potentially huge hole in the Budget predictions, and I have not seen it adequately covered by the OBR or in the Red Book. When challenged on that, the Minister said that the Rothschild report is old and that market conditions have changed. If that is so, I would reasonably expect the Government to be confident enough about their assertion to put forward the figures and funding bases on which the policy has been built.

The other part of the potential black hole is the increasing resource allocation budget charges on the student loans arising from the increase in default rates. It is estimated that if those reach 47%, the cost of the current student-funded scheme will outweigh the old system. We are already at about 40% to 42%, and the latest predictions indicate that it will reach the threshold very shortly. That is acknowledged by the OBR, although there is no acknowledgment of how this will be funded.

I believe that there is a huge potential hole in the Government’s Budget predictions, because they are locked into a financial funding model for higher education that is increasingly becoming unfunded. Furthermore, they have grafted on to it a welcome commitment to funding extra places, but on the basis of a model that does not appear to be viable and a funding regime—the sale of the student loan book—that looks unlikely to realise the necessary amount of money.

I would like to have been able to talk at some length about exports. I will simply quote a press release from the Black Country chamber of commerce:

“This was nothing more than a political budget with a nod to Scotland and another example of the disconnect between politicians and the world of business”.

The fact is that the rhetoric does not match the reality on the ground.

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3.23 pm

Sir Edward Leigh (Gainsborough) (Con): I may not agree with all that the hon. Member for West Bromwich West (Mr Bailey) says, but he always speaks with calm courtesy and forensic good sense, so we are grateful for his comments. I am also grateful that my hon. Friend the Financial Secretary is sitting on the Front Bench. I hope that what I am going to say is not entirely off message from what the Government believe. Because I respect and admire him so much, I have a sneaking suspicion that privately he might agree with much of what I will say.

The fact is that, for all the huff and puff, when it comes to what it actually puts into and takes out of the economy, the Budget represents a 0.3% change—£2 billion out of £732 billion of spending. That is somewhat worrying when we consider the very big challenge we face on deficit reduction and, following what the hon. Member for West Bromwich West said, what could be a debt-fuelled boom, which is the traditional British way of climbing out of recession.

I wanted to try to start on a positive note, however, so I should quickly say that I think this Budget will be remembered for its entirely freedom-loving, Thatcherite, people-trusting measures on annuities. However, those points have been made repeatedly, so I do not need to labour them.

I want to talk about what is happening to higher rate taxpayers. The top 5% pay 45% of all income tax. The top 1%—just 30,000 people—pay 30% of all income tax, which is more than the lowest 50%. Let me say gently to the Business Secretary—he is not here, but I am sure he will read Hansard avidly—that I think he was being slightly disingenuous when he replied to my intervention in which I bemoaned the fact that we are not indexing the higher rate tax. He said, “Well, we’ve made a start”, but it is a very small start. Under this Budget, 400,000 more people will still be dragged into paying higher rate tax. Some 1.4 million middle-earners—small business men; managers; hard-working nurses, matrons and teachers at the top of their professions; police sergeants—have all been dragged into this higher rate of tax during this Parliament, on our watch.

The higher rate of taxation is almost turning into the standard rate. The top half of taxpayers contribute 90% of all tax intake. When Nigel Lawson introduced the 40p rate in 1988, it was paid by just 1.35 million people. Now, 4.5 million people pay the higher rate of tax, and by 2015 that figure will have risen to nearly 5 million. I personally do not believe that this is what the higher rate of tax was designed for. It should attack people on higher rates of earnings, and that means those who earn a reasonable amount of money; it should not attack police sergeants, senior matrons or classroom teachers. That is wrong and inequitable.

We need from the Government a sense of mission and direction, and the sense of mission and direction that I want to see is one that is aimed at simplifying all taxation. After every Budget speech—rather like the Secretary of State, I think I have now sat through 18—I make the point again and again that simplification pays off. When we reduce taxation on the top earners, as we saw when we reduced the top rate of tax from 50% to 45%, we encourage enterprise, remove avoidance and even evasion, and generate more income and growth.

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This is a Conservative philosophy of enterprise and rewarding hard work, and that is what a Conservative Government must be about. I earnestly enjoin the Government to try to right this inequity against higher rate taxpayers in their next Budget, or, if not, in the manifesto.

3.28 pm

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): I want to touch on a couple of issues in the brief time available.

The first of those is the changes to the carbon price floor, on which I intervened on the Business Secretary earlier. I probably should not be surprised, but I am concerned, that he did not appear to know that the compensation scheme for the carbon price floor announced in November 2011 and due to come into effect in April last year has so far paid out precisely nothing to energy-intensive industries. When energy-intensive businesses such as the brickworks, steel plant and glass fabricator in my constituency hear that there will be a compensation package in relation to the renewables obligation and feed-in tariff, it is not surprising, given that it seems highly unlikely that the back-dated scheme that they were previously promised is going to be delivered, that they are dubious about whether they will ever receive this benefit.

There is, overall, a supreme irony in the Government’s moves to limit the impact of the carbon price floor, characterising it as a green tax. At last year’s Conservative party conference, the Energy Minister, the right hon. Member for Sevenoaks (Michael Fallon), referred to it as “assisted suicide” for manufacturing industries, seeming not to realise that it was his Chancellor’s policy and that his party voted for it, whereas we opposed introducing it without an assessment of the impact on manufacturing industry.

The Chancellor was at it again yesterday when he implied—the hon. Member for Clacton (Mr Carswell), who is no longer in his place, said this in his speech, too—that the answer is shale gas and that it could have the same impact in the UK as it has had in the US. That is a simplistic and highly misleading extrapolation of the US experience, given the different geology, land rights and, crucially, the US’s inability to export shale gas. Those simplistic extrapolations are either ill informed or spectacularly and deliberately ignorant.

The Office for Budget Responsibility figures for oil revenues are not just a salutary warning against the danger of over-reliance on a resource that is by definition declining and by record volatile. The Scottish National party is engaged in a process of taking the most optimistic assessment of gross value and suggesting it as state revenue in order to seek to persuade my constituents and others to vote to leave the UK, but the lesson from the figures is that the pooling and sharing of resources is a much more stable proposition with regard to maximising economic recovery from what Sir Ian Wood’s report, whose recommendations the Government seem to accept, rightly refers to as a mostly mature basin.

The Chancellor also referred yesterday to the extension of the film tax credit, which is welcome, but many British films today are co-productions. Indeed, the critically acclaimed “Under the Skin”, which was filmed in and around Glasgow, stars Scarlett Johansson and was released last week, is just one recent example of a stunning

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co-production from Britain and other countries. The marginal extension of the tax credit has been hindered by the news that just last week Her Majesty’s Revenue and Customs issued a clarificatory note stating that co-productions are excluded from access to funding from the enterprise investment scheme. I asked the Minister responsible for the arts, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), about this during Culture, Media and Sport questions last week, but he did not appear to know anything about it. A theme is developing of Ministers not knowing the impact of their own policies, and that is a concern.

I want briefly to refer to changes to gambling. Increasing the tax take from fixed odds betting terminals does nothing to deal with the adverse effects those machines have on many communities up and down the country. Indeed, it may have the opposite effect and put the Treasury in the box of those defending the vested interests in high-stakes, fast-pay gambling machines that are ruining many lives.

Finally, I welcome the change to the bingo tax, but the Tory party chairman—who will, I am sure, shortly be promoted to a senior ministerial position—let the cat out of the bag last night with his post, infographic or whatever he is trying to call it referring to bingo as something that “they” enjoy. I say to the Financial Secretary that I am a fairly frequent visitor to the Mecca bingo club in Rutherglen, which is a very good community institution to which many of my constituents enjoy going to interact socially as well as to gamble as a leisure pursuit. They tell me that what they wanted from this Budget was some real action on energy bills, particularly given that they have gone up by £300 at a time when, latterly, gas wholesale prices have been largely stable. They want to know why it is that the bankers bonus culture has been extending and deepening in this country. They want to know why it is that the primary act of this Chancellor and his ministerial team is to institute a tax cut for millionaires rather than for hard-working people. For them, this Budget has precious little.

3.33 pm

Mr Robert Syms (Poole) (Con): I welcome the Budget, not just in and of itself specifically, but because it is part of a long-term economic plan. It is important that Governments look at issues on a long- term basis. I think we sometimes forget the depth of the crisis of 2008. There was a 7.5% fall in output and it was the biggest recession in British history, significantly worse than that of the 1930s. On top of that, there was a major banking collapse and, following that, a euro meltdown and crisis. Therefore, the stability provided by the coalition Government’s steady plan to rebalance the British economy is a sensible and welcome development.

We have been blessed over the past three or four years by lower levels of unemployment than might have been predicted and we have started to see a recovery and higher levels of employment. The reason for that is that British workers have reacted in a rational and sensible fashion and have tried to price themselves into jobs. The consequence of that is that living standards have fallen and, as the Institute for Fiscal Studies has said, the fall from about 2007-08 until last year was about 7%. If there is a massive fall in output, it is inevitable that living standards will fall.

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We are now starting to see much more evidence of a proper recovery, with pay picking up, inflation coming down—they should cross during the year—and the Government making a great priority of raising tax thresholds. If we are reforming welfare to encourage people to take jobs, it is both logical and sensible to make many jobs more attractive by reducing tax. I have heard some of the criticisms, such as, “What if you don’t pay tax?” Part of the problem of the Government taking 3 million people out of the tax system is that fewer people will pay tax at lower levels. However, it is good to provide more incentives within the British political system.

We are getting more growth, and we are starting to see a recovery in investment. If the eurozone, which could still be problematic, settles down, there is a prospect of higher exports. I welcome what the Government have done in providing more export credit. I also welcome what they have done for manufacturers by addressing some of the problems with the EU carbon floor price, which would have made many of our heavy or energy-intensive users uncompetitive. The key point is that the Government have listened to representations and made adjustments to help British business.

My principal point is that I welcome the changes in savings and pensions. Throughout most of my time in the House, people approaching the age of 65 have come to me to bemoan the fact that they are forced to buy an annuity, and that it will remain with the insurance company when they die. We are giving people the real freedom for which we campaigned in opposition and that we had in our manifesto, and it is absolutely right to do so. Moreover, we are allowing people to make their own decisions about how they spend their own money. It seems to me rather bizarre that people have a pension pot, but then have the problem of trying to calculate at the beginning of the year how much they can take out. I see no reason why we cannot just trust people, and ensure that they can make their own decisions about their retirement. That requires a bit of maturity and we will provide more advice, but it will be a very real freedom for many pensioners in Poole.

In addition, I welcome the Government’s proposal for the bond that, at least for a time, will give a higher rate to many pensioners who have not had a big rate of return on their savings. Quantitative easing has made life very difficult for pensioners with savings, and the bond is one way to offset that in these extraordinary financial times. Again, the Government have listened and have responded to that particular problem.

We are encouraging savings. We are giving pensioners more flexibility. We are addressing the needs of and helping exporters; we have seen many good examples in the car industry and aerospace. We are helping heavy manufacturers, who have real problems with the carbon floor price. The Budget will help jobs and growth. We are seeing the start of higher productivity and higher investment. I hope that that continues, and that our country goes from success to success.

3.38 pm

Gavin Shuker (Luton South) (Lab/Co-op): It is extremely gracious of you to call me to speak in this debate, Madam Deputy Speaker.

I want to say a few words about a genuine long-term plan—Government Members seem to use the phrase “long-term plan” quite a bit—for work. It is clear that

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this Budget has ducked the key challenge of how we ensure that as the number of jobs in the economy increases, the quality of those jobs improves at the same time.

There has been much talk in this place over many years—not only by Government Members but by Opposition Members—about where improvements to the British economy will come from. There has been a lot of talk about entrepreneurialism, finance and different sectors of industry, but we tend not to step back to talk about the quality of work, even though work is fundamental to how we generate growth in our economy and how people find dignity during most of their waking hours in the day.

My broadest concern is that as we talk about the effects of this Budget—fiscal measures here, changes to taxation there—we may to a degree miss the point. We know that what makes work satisfying to people is autonomy, mastery and purpose. I fear that those three values are getting lost in the recovery that is under way. I shall suggest a few ways in which we might respond through policy to improve the quality of work for millions of people up and down the country.

It is a tragedy when people find themselves unemployed and when there is long-term unemployment. In Luton, 950 young people are without work and are claiming jobseeker’s allowance, and 1,300 people of all ages have been out of work for more than 12 months. Behind each figure is a human tragedy that affects many families. Older people who find themselves out of work find it incredibly difficult to get a job, and we know that many of them will not find one in the current economy.

At the same time, there is a cost of living crisis. Wages and prices have become decoupled. It is estimated that it will take 15 years for wages to recover and get back to the consumer prices index level of inflation. It is debatable whether they will ever reach the retail prices index level.

We need to tackle the issue at both ends: work and the quality of that work. On the quality of work, we have seen a tripling of the number of zero-hours contracts. More people are working in the economy, but many of them are on zero-hours contracts and have little job security. Those who are still in work have had their rights taken away. For example, there are the challenges with tribunals, which we have discussed in the House before. We cannot win in a race to the bottom. Many people still cannot get a job. There is a lack of dignity in not having a job, but there is also a lack of dignity in having a poor quality job. This is a long-term challenge not just for this Government, but for whichever Government find themselves in power next.

Labour’s jobs guarantee could be a necessary first step in allowing young people in particular to find work and get back into the rhythm and dignity of work. We then need to look at the quality of the work and the remuneration for it. That is why we need an expansion of the living wage. Our policy of a 12-month tax rebate for low-paid workers who are bumped up to the living wage for the first time, which would pay for itself over time, would be extremely helpful, as would the reintroduction of the 10p rate. That would be hugely important in encouraging people to get back into work.

We need action to meet the challenges of our economy. An alarming statistic that other Members have talked

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about is the productivity gap. Output per hour in this country is 21% lower than the G7 average. That hints at a lack of business investment in machinery and so on.

I return to autonomy, mastery and purpose. Where will the high-skilled jobs come from in this economy? When will we recognise the cost of living? Many people will look at the actions of the Government and conclude that in the Budget they have ducked the challenge. If they were running a business the way they are running the economy, they would be sweating the assets to get growth. I think it is fine to sweat the assets for a period, but we must recognise that the greatest asset we have is the people of this country, and they will not put up with a Government who sweat the asset that is their work.

3.43 pm

Neil Carmichael (Stroud) (Con): It is a great honour to follow the hon. Member for Luton South (Gavin Shuker), not least because he and I will be working together on the all-party group on polar regions, which is absolutely fabulous.

The Budget is a staging post in the mission to rescue the British economy. It is an important staging post and it signals some important messages. First, I will introduce some thoughtful points on productivity, which we have discussed from time to time in the Chamber. Increasing productivity is the way to deal with the cost of living crisis, because we need a work force who are skilled to such a level that we can enhance our capacity in manufacturing, engineering and related activities. The importance of ensuring that we have a skilled work force is embedded in our long-term economic strategy and is part of the Budget because, as I have said, it is a staging post.

In my constituency, I have promoted manufacturing and engineering through the festival of manufacturing and engineering, which is designed to ensure that young people are introduced to the advantages of working in manufacturing and the opportunities that are provided by a career in engineering. They will end up dealing with the cost of living crisis by contributing to increased productivity and an economy that blasts forward by competing powerfully not just in the EU, but in the global economic race that we are undoubtedly in.

I am pleased to welcome the changes to pensions, annuities and so forth. Encouraging people to save is a really important part of our strategy, because the savings ratio in this country has never been worse. The Chancellor has recognised that and taken steps to encourage people to save. That is what the changes to pensions and annuities are fundamentally all about. We should welcome them as a huge step in the right direction, not only in ensuring that elderly people have choice but in improving people’s overall capacity and willingness to save. They are great news.

Something else that is important and relevant to my constituency is the framework that we have already created to encourage investment in infrastructure. We really need to do that, and I could mention a lot of projects in my constituency that will need investment in the immediate future. One is a potential new bridge across the Severn to ease congestion on both the Forest of Dean side—my hon. Friend the Member for Forest of Dean (Mr Harper) has made that point several times—and my side, where such a development would enhance economic growth opportunities in an area where they need to be created.

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The changes to ensure that firms that are high energy users will benefit is great news for my constituency. We have a lot of companies that have a huge appetite for energy. BPI, a recycling firm, is a case in point. It has sites across the country, which will all benefit from the changes.

We have to ensure that our overall package is continued with, and that is why it is important to talk about the long-term economic plan as frequently as we do. Part of that plan is to reduce the deficit. Of course we are disappointed that the deficit is not as small now as we had hoped, but we are travelling in the right direction and can say that it will be further reduced in significant chunks. That is what the Chancellor has promised and will now deliver. That is the bedrock of our economic plan, because we cannot have sustainable growth if we are constantly threatened with high interest rates and constantly undermined by having one of the largest deficits in the western world. That part of the long-term economic plan must not be forgotten and must be promoted whenever possible. The real economy, which I have been talking about, is the key to delivering jobs, tackling the cost of living and putting Britain back into the competitive place that it should hold globally on the economy and growth.

3.48 pm

Seema Malhotra (Feltham and Heston) (Lab/Co-op): It is disappointing that this has turned out to be a Budget for the few, not the many. I am particularly concerned that it has delivered nothing to support young people and the long-term unemployed, and it is on that point that I wish to make a few remarks.

We all know that young working families are struggling. Last week I met Sarah, a young mum of two, in a local supermarket. Two years ago, the jobcentre forced her to go on a course at a time when she was very ill during her first pregnancy. The tutor on the course sent her home almost as soon as she arrived, and her doctor then signed her off work for the pregnancy lest she even lose the baby. Her partner has been out of work for three years, which has had a knock-on effect on his self-esteem. He is a young man struggling to find work and wanting to support his young family, and he has felt that the courses being offered to him are well below what he needs and are doing little to increase his chances of work.

I met a mum who was concerned about her son’s future. He has been on a zero-hours contract with no certainty about what work he will get or on what day. The stress that it has caused the family is enormous. Imagine not being able to plan if and when to do a course of further learning, or when it might be possible to see a doctor, care for a family member or go out on a certain day. Zero-hours contracts definitely need reform.

More than 1 million 16 to 24-year-olds in the UK are not in education, employment or training. Long-term unemployment is up more than 300% since 2010, and long-term youth unemployment has almost doubled in that period, yet pay is still rising faster for bankers than for the average worker. This was not a Budget for those such as the disabled man I met recently who was hit by the bedroom tax; for the families and parents struggling with rising child care costs; or for small businesses struggling to pay their business rates.

I welcome the reduction in bingo duty and I am pleased that the Government have listened to calls from Labour and the public about reducing that duty. I thank

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many of my constituents, including Mike Ellis, a bingo club manager in Feltham, for their work on that matter. The fact remains, however, that the recovery is not yet reaching the many. The Chancellor and the Prime Minister often talk about getting young people into work, but I am concerned that there is no actual plan for young people. Making school-based work experience optional rather than compulsory, as the Government did in September 2012, is one shocking example of that—a move that was opposed by Labour and by 89% of those who took part in the Department for Education consultation. In the past year alone more than 64,000 fewer young people have been able to take part in work experience, compared with the previous year.

The young people of today are the taxpayers and leaders of tomorrow, and we have a responsibility to hold open the doors so that they can succeed. That is why getting young people back to work is a priority for Labour. It is about our duty to the next generation, to give them the chances they need, and confidence that the Government are on their side. Labour would put young people back to work with a job for every unemployed young person, paid for by a tax on bankers bonuses. Young people also need a place to live and bring up their families, and Labour would build up to 200,000 homes a year by 2020. Tackling the housing crisis is not just about fuelling demand, but building new homes and increasing supply.

We would freeze energy prices to help tackle that modern scourge: the cost of living. Labour would get finance flowing again to businesses, with a proper independent business investment bank and a network of regional banks to support businesses that need finance, not just in London but in our industrial centres in the north that have been so neglected by the Government and on which our national economy depends.

This country needs an active Government with the courage to bring forward bold policies to build a strong, sustainable economy that generates wealth for the many, jobs for the unemployed, and prosperity for all. Instead, it is a shame that this out-of-touch Chancellor, and Prime Minister, has delivered a Budget that caters for the privileged few, while working families and mums like Sarah fight for scraps from his table.

3.53 pm

Christopher Pincher (Tamworth) (Con): It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra) because it gives me an opportunity to let her know that in my constituency, youth unemployment has fallen by 40% in the past 12 months. I am also pleased to speak in this Budget debate on business because as we all know—at least, as we should know—it is business, not the Government, that generates wealth. Wealth generates jobs, and jobs lift people out of despondency and dependency.

Chloe Smith: Does my hon. Friend agree that it is also possible for Members of the House to work with businesses in their constituency and do something about unemployment? I gave the example of Norwich for Jobs.

Christopher Pincher: I agree with my hon. Friend. I hold an annual jobs fair, and last year 300 to 400 jobs were available to the 176 people who came to look for

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them. There were more jobs available in my constituency than jobseekers at the job fair, which is an indication of how our economy in the midlands, and particularly in Tamworth, is developing.

I agree with the hon. Member for Feltham and Heston about bingo and the change to gross profits tax. That tax was introduced in 2009 and created an anomaly because it meant that that soft gambling industry was taxed at 20%, compared with most of the rest of the industry at 15%. Added to the fact that bingo operators cannot reclaim VAT on their investment or refurbishment costs, it means that many operators have to carry a cumulative and punitive tax, equivalent to VAT of 32%. That was stifling the industry, with one bingo hall per week going to the wall. The Chancellor’s changes will mean more money for stakes, which is good for punters, and more investment in bingo halls and more jobs—a good thing that will also increase tax yield.

I am very pleased to see the changes to air passenger duty and start-up support for new routes. Birmingham airport, my local airport, will benefit from that. It is currently extending its runway so that it will be able to take long-haul flights to and from major markets in China and India. If the Treasury is listening, it can provide further support by adding Birmingham airport to the regional air connectivity fund list.

I hope the Treasury will work closely with the Department for Transport to consider the Whitacre link, a railway line axed by Dr Beeching. The line runs through Tamworth to Birmingham airport, and new track would reduce travel time from Tamworth to Birmingham airport from 40 minutes to just 18 minutes. That is the sort of local, sensible infrastructure development that business people in my constituency want to see. My hon. Friend the Minister knows my views on HS2. If it goes ahead, it will not be enough for it just to link our major cities. We need to improve the infrastructure around those major cities to realise the potential benefits of HS2. Building the Whitacre link would be one way of doing that.

I welcome the continued drive down of corporation tax. That will help to expand businesses and create jobs. I hope the Chancellor will not see the 20p rate as an end in itself, but as a means to an end: matching the Irish 12.5% rate of corporation tax. If we can get down to such a level, we will attract businesses to Britain that currently go to Ireland, and build a better and stronger economy. That is what business folk in my constituency would like to see.

Despite the rather gloomy concerns of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), I support and approve of the Government’s determination to drive down the cost of energy on businesses. The carbon price support rate, at £18 per tonne of carbon, is a good move. I think the Liberal Democrats would prefer to see about £30 per tonne by 2020, but capping it at £18 will reduce about £50,000 of cost for small and medium-sized businesses in my constituency.

There is, however, an energy elephant in the room: the huge amount of infrastructure spend we need to undertake in the next 10 years to keep our lights switched on, our water warm and the wheels of industry turning. The big six, which are already highly leveraged, can probably add no more than £70 billion to the £110 billion cost. If we are to get the £40 billion we need from

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independent players, and not rely on the taxpayer or the consumer to foot the bill, we need to ensure that electricity market reform and the signals to investors are right, otherwise there will be a cash crunch.

In general terms, the Budget was good. It was a Budget for business. In my constituency, businesses are upbeat and they say that they expect to grow. BMW is coming to Tamworth this year with 100 new jobs. Let us have more of the same: let us have more Budgets for business.

3.59 pm

Yvonne Fovargue (Makerfield) (Lab): I welcome one measure in the Budget that has had relatively little publicity: start-up support for regional airports to link up with future markets by supplying new routes. Manchester airport and other regional airports are key drivers of local economies. Encouraging new routes and businesses into the regions is vital, and I look forward to seeing more details on that.

I want to move on to one of the central planks of the Budget: the measures for savers. Help for savers is welcome, but this help does not target those with little or no savings. A report produced by HSBC last year showed that 25% of people across all age ranges have little or no savings. Indeed, 33%—a third—of people in the 18 to 44 age range have no savings at all. On the basis of that evidence, HSBC estimates that 8 million people in the United Kingdom have no savings.

Many of my constituents can relate to that. They are indeed the “makers and doers” referred to by the Chancellor, but they are not making do. They are juggling their finances, with no spare money to save for a rainy day because there has never been enough sunshine. These are the people who turn to payday lenders when there is a broken washing machine, or when the children need new shoes and school clothes. If the Chancellor is serious about keeping people out of the hands of the payday lenders or “pay weekly” stores such as BrightHouse, they should be helped through savings measures. They are the people most at risk of descending into a spiral of debt and who end up seeking help from citizens advice bureaux or StepChange. In fact, figures from StepChange show that only 5% of people who have sought its help have any savings.

Simplifying and raising the limits for individual savings accounts are likely to make little difference to those in middle and low-income households who have few if any savings. Just one in four households with incomes of less than £400 per week has an ISA, compared with half those with incomes between £700 and £1,000 a week. Research shows that matched savings and savings account bonuses give lower-income households a much stronger incentive to save than interest rates or tax reliefs.

The additional ISA changes will have cost the Exchequer £565 million a year in lost tax on savings by 2018-19. Surely that money could be better spent on providing savings account bonuses or matched savings targeted at those in lower-income households, who have the least resilience to financial shocks. In fact, the matched savings schemes introduced by Labour were one of the first things to be abolished by the coalition Government in 2010, on the grounds that “the country could not afford them”. As the money and the will to encourage savings clearly now exist, why do the Government not consider reintroducing, and even expanding, such schemes?

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A savings target of just £500 for low-income households, which represents just below the average payday loan debt owed by StepChange clients, could be just that “rainy day” buffer that people need to keep the wolf—or perhaps I should say the shark—from the door.

Yet again, we have a Budget that does little for those on the very lowest incomes. Raising the income tax threshold to £10,500 will do significantly more for those who are paying the higher rate of tax and earning up to £100,000 a year. They will gain £1.92 per week, whereas those who are working full time on the minimum wage are highly likely to be receiving housing and council tax benefits, and will therefore gain just 29p per week. At this rate, even if they saved every penny of the increase, it would take more than 100 years for them to be able to take advantage of the new ISA limit, and 33 years for them to have the buffer of £500. No wonder unexpected expenditure falls hardest on those households, making the need for incentives to help them to save more urgent than ever. No wonder a payday loan is taken out every four seconds in this country.

This is not a Budget that helps the hard-working families in my constituency who face a cost of living crisis. It is not a Budget for those who are struggling to get by, and to whom saving even £500 seems an impossible dream. The Chancellor could have helped those people, but he chose not to. He could have taken on the payday lenders by helping to eliminate the need for them, but he chose not to. This is not a Budget for the many in my constituency; it is a Budget for the few.

4.4 pm

Richard Graham (Gloucester) (Con): Yesterday we heard a Budget which, as The Sun put it, we can all cheer—but not quite all, because the response from the Leader of the Opposition was a litany of class warfare slogans, along with the line “You’re worse off under the Tories”, which, as The Sun rightly concluded, could convince only those with the memory of a goldfish. Today we had another goldfish to entertain us. The shadow Chancellor was more entertaining than his boss, but there was little danger of the truth interrupting his cracks; for he has form, and—whether we are talking about his claim of an end to boom and bust, his prediction of a triple dip, or the flatlining gesture that we saw for nearly three years—the truth has consistently been the opposite of what he says. So when he claimed there was nothing in this Budget to help with the cost of living, he only confirmed to everybody listening that there was, in fact, plenty, and that the statement was consistent with his role as the best reverse indicator in politics.

My constituents in Gloucester will have been absolutely delighted with another axing of Labour’s hated fuel escalator. Some 25 million people around the country will keep £800 more a year from their earnings and 1.5 million lower-income pensioners will not pay 10% tax on their first £5,000 of savings: these things make a difference.

The Opposition is off the mark not just on those changes, but also in their response to some of the smaller, but symbolic, steps, like the changes in bingo tax and the beer duty escalator. I am sure the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) supports his constituents who play bingo and recognises the social benefits of that, but can he explain to them why his Government taxed bingo more than any other form of gambling throughout their 13 years in office?

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The shadow Chancellor derided the cut in beer duty. I invite him to come to the second Gloucester beer festival on 4 April this year. The Gloucester brewery was created three years ago; for all 13 years of the Labour Government we did not have a brewery at all, but we do now. Let him come and meet the beer lovers in Gloucester and try to convince them we should get back on to his hated beer duty escalator.

The truth, too, is that we know what manufacturing needs, whereas under the previous Government manufacturing halved. My city, the city of Gloucester, has always made things. We have always manufactured, but manufacturing was the main loser when we lost 6,000 private sector jobs under the previous Government. Between 1997 and 2010 the number of apprentices went down so sharply that by the time of the change of Government there were only 25 people going into Gloucestershire engineering training. Today the figure is more than four times greater.

The changes in the carbon pricing for heavy energy users and the extension and doubling of capital allowances to £500,000 a year are incredibly important to a city such as Gloucester, because our engineering is close to capacity and it needs the stimulus to invest and the opportunity to expand and to grow. If it gets that, it will go on creating more jobs and more opportunities for the young people of my city. Already the numbers of new apprentice starts are four times higher than in 2009-10. This is not about cost of living in terms of energy prices miraculously suddenly being halved; it is about cost of living in terms of the opportunities for young people.

The shadow Chancellor recently came to Gloucester. He did not stay for long and he did not visit a business—he certainly did not visit a manufacturing company and see the transformation that has taken place in that sector over the past four years—but he did make a speech to Labour party members and he spoke briefly to the press afterwards, telling them he was deeply concerned about the rate of youth unemployment in Gloucester. In one respect he was correct in saying that because we always need to do more—we must go on bringing it down—but actually the figures have come down sharply and are some 25% lower than they were at the last general election. Youth unemployment is coming down and will go on coming down.

Today we have been discussing a Budget for people who make things, and in a city that makes things, such as Gloucester, that is good news indeed.

4.8 pm

Alison Seabeck (Plymouth, Moor View) (Lab): The Chancellor talked about an economy that is now improving and I do not think anybody would be so churlish as not to acknowledge that there is some improvement, but he also suggested there is further pain to come and it is clear to everyone outside this place, if not to those on the Government Benches, which people and families are going to bear the brunt of the prolonged period of austerity. It will not be millionaires; it will be low-income families, who are not actually terribly impressed by the raising of the tax threshold when the overall cost of living increases are hitting them a great deal harder and when, for those who will be in receipt of the new universal credit, almost every penny will be clawed back.

Citizens Advice tellingly confirms that those earning around £100,000 will benefit more than those earning the minimum wage. What we need, and what was missing

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from the Budget, is positive news about infrastructure investment in our region, such as the building of homes that families and first-time buyers can afford to rent or purchase, and major projects such as the diversionary rail line to ensure that the region is resilient in severe weather events. I agree with the hon. Member for Somerton and Frome (Mr Heath) that expectation is elevated in the south-west about what the autumn statement might contain.

The Labour leader of Plymouth city council has made it clear that investment in new signalling to increase line speeds, new rolling stock and improved rail resilience would help to generate some 32,000 new homes and 42,000 new jobs in the south-west. That investment would bring work, taxes would roll into the Treasury, the south-west economy would benefit and large and small firms would feed into the procurement process, supporting all that growth.

Such investment would undoubtedly support the excellent work of our universities, which could without doubt do even more to support entrepreneurs. Plymouth university is working closely across local enterprise partnership boundaries in support of the work being done by Sir Andrew Witty to drive economic growth.

There were some positive measures in the Budget to help business. I welcome the support for exports, as I welcome the reduction in bingo tax, because it is something on which I have campaigned under both the previous Government and this Government. Devon air ambulance will be much better placed to continue to offer its life-saving service following the changes to VAT on fuel. There was no mention of the business rate change, which many small businesses in Plymouth would have liked to see. I have concerns about the pension proposal, given the history of mis-selling and given personal experience of someone who was persuaded, with expert advice, to take equity from their mortgage while they were seriously ill in such a way that after their death, their partner was left in a dire position. The quality of the advice offered is a serious matter. There is also the question of whether people can get advice on more than one occasion.

I was accused by the Pensions Minister, the hon. Member for Thornbury and Yate (Steve Webb), of being patronising because I dared to ask whether women of a certain age—roughly my age—would face disbenefits as a result of some of the pension changes. He failed to answer that question, and he also failed to offer to place the evidence, particularly that concerning women and the wider risk assessment, into the Library for hon. Members to see.

My colleague the Labour candidate for Plymouth, Sutton and Devonport, Luke Pollard, yesterday produced figures showing that in Plymouth the average family is about £1,800 a year worse off because prices are rising much faster than wages. When we consider that the average income in Plymouth is about £20,000, not the £100,000 mentioned by the Chancellor yesterday—he is clearly very out of touch if he thinks that that is an average wage—£1,800 is a huge loss. How is it fair that nurses in Derriford get only a £250 pay rise, while higher- rate taxpayers become significantly better off?

It is the same old Tories. I look back at my father’s election address from February 1974, in which he highlighted tax cuts for the rich paid for by price rises

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for the rest, rising house prices and rents, and the worst house building record since 1963. Of course, we are now facing the worst housing building situation since the 1920s. The attempts to rebrand the stalled Ebbsfleet development would be laughable if the problem were not so serious. Initially, the Minister without Portfolio, the right hon. Member for Welwyn Hatfield (Grant Shapps) talked about building 22,000 homes there, but we are now being promised only 15,000 homes on a site that has little inherent land value.

If the Chancellor is serious about ensuring that the economy continues to grow and does not falter, he must consider the measures proposed by my right hon. Friend the shadow Chancellor—

Madam Deputy Speaker (Dawn Primarolo): Order.

4.14 pm

Mr Robin Walker (Worcester) (Con): The hon. Member for Plymouth, Moor View (Alison Seabeck) has just mentioned her father’s election address, and I am reminded of my father’s election addresses about how Conservatives had to clear up the mess that Labour left behind.

Like many Members across the House, I am passionately focused on employment. We needed the Budget to encourage business investment and help the recovery, which is gaining pace, to deliver more and higher-quality jobs. The hon. Member for Coventry North West (Mr Robinson) made an interesting point about ensuring that those jobs deliver greater productive capacity, and I agree with him that we need to do that.

The claimant count in my constituency of Worcester is down from 2,545 immediately before the election—and from a peak of 2,700 under Labour—to around 1,900 now. Youth unemployment peaked at 800 under Labour and is now below 500. That is much better, but there is no room for complacency. In fact, we have seen some small rises in unemployment in recent months, which I abhor. I have said that we need this Budget to deliver investment in jobs.

When I talk to local businesses, especially manufacturers, about what they need if they are to invest in jobs, they tell me that they need support to invest in plant and machinery, which can raise the productive output of each job. We have seen that support in this Budget. They also want support for research and development that will anchor manufacturing jobs in this country, including the jobs at Yamazaki Mazak, which has its European research headquarters in Worcester. They need help with the cost of employment, and this Budget has introduced the implementation of the employment allowance, which will provide a huge boost to businesses large and small in regard to the number of people they can employ.

It is interesting that, at the start of this Government, we got rid of Labour’s jobs tax—an increase in the cost of national insurance for every business and employer—and that, as we come towards the end of this Government, we are taking a further step forward in the form of the employment allowance. It will provide a real incentive to take young people on, and taking people under 21 out of national insurance will help more young people to get into the businesses of the future.

Crucially, we need to drive forward the skills agenda. Many of the engineering businesses in my constituency—including Yamazaki Mazak and Worcester Bosch—are

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great supporters of apprenticeships. Many small and medium-sized enterprises are also beginning to take on apprentices. I am glad to see in the Budget the £85 million extension of support for SMEs to take on apprentices, and to see the £20 million increased funding for degree level apprenticeships. The Business, Innovation and Skills Committee, on which I am proud to serve, has challenged the Government to deliver on both quality and quantity for apprenticeships, and so far they have an excellent record on both.

I must mention some of the spending measures in the Budget that could directly benefit Worcester. The £20 million cathedral fund will be very welcome in many of our county towns, and the horse race betting levy extension will support Worcester race course. The cathedral and the race course are two vital landmarks in the city, and I am delighted that both could benefit from the Budget. The extra £140 million of flood funding is also extremely welcome for reasons that will be all too obvious to anyone who has watched television in recent months. It is also great news that we have seen progress on the question of VAT for air ambulances. That is a huge achievement following campaigning by many Members. I would now like to see progress on the question of VAT for hospices.

The Budget did not mention delivering fairer funding for schools, although the Chancellor did mention it in his autumn statement. We also had a statement on it last week, and a huge step forward has been taken on that issue for the first time in decades. This is a cross-party campaign in which many hon. Friends and hon. Members from across the House have taken part.

Christopher Pincher: My hon. Friend is right to say that the Campaign for Fairer Funding for Education is a great cause, and I congratulate him on championing it. Does he agree, however, that in so far as the fairer funding has been spread around the country, it seems to have overlooked Staffordshire?

Mr Walker: I do agree with my hon. Friend, whose intervention has given me the extra time I need to make the point that, for many years, that campaign was led by the former Member for Stafford, David Kidney, who spoke passionately about the issue. I have said to the Education Secretary and others that it would be unfortunate if Staffordshire were passed over in this regard, but £350 million represents a big step forward for the lowest-funded authorities and, by my calculations and those of f40—the Campaign for Fairer Funding in Education—Staffordshire is among those lowest-funded authorities and deserves help.

The Financial Secretary to the Treasury, my hon. Friend the Member for Bromsgrove (Sajid Javid) is on the Front Bench today, and he is a Worcestershire colleague. I am delighted that Worcestershire will be receiving £5 million to help schools that have been underfunded for a long time. The long-term economic plan to take our country forward must focus on skills and on preparing young people for the future. Fair funding for education is a vital part of that, and I am grateful for the enormous support that colleagues have given me during this campaign. Indeed, most of my colleagues sitting on these Benches at the moment have supported the campaign and spoken passionately about it. I am grateful that it is a cross-party campaign, and

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one that we have been able to take forward significantly this year, and in this Budget. This is a Budget for jobs and for the future, and it allows us to take a significant step forward in achieving fairness for our country.

4.19 pm

Alex Cunningham (Stockton North) (Lab): When the Chancellor rose to his feet yesterday, people across the country hoped he would have something to offer on the escalating cost of living and an economy that has seen the value of wages shrink. People in the north-east hoped he would offer help to do something about the highest unemployment levels in England. Nearly 1 million young people out of work, many for more than a year, hoped for some kind of job guarantee that would see them earning a living and learning along the way, and public sector workers hoped for a better deal and a fair reward for their work, but it was not to be. Instead, as we heard my right hon. Friend the Leader of the Opposition say, we have a Government who are able to give millionaires a £200,000 tax cut but cannot increase nurses’ pay by £250 a year. This is a Budget with inequality written all over it.

By failing to address the growing problems of inequality, higher prices, falling real wages and catastrophic housing shortages, the Chancellor has confirmed that any recovery that exists is being felt only by the privileged few. I have already alluded to the comments from Citizens Advice chief executive, Gillian Guy, who said:

“The Chancellor talked about making, doing and saving. This Budget needs to work for those who are making do and can’t save.”

She continued:

“We’re halfway through the austerity programme and many spending cuts have yet to bite. Families are feeling the cumulative impact of the stripping away of support and services from all sides.”

Citizens Advice tells us that

“3 in 5 people worry about the effect rising household bills will have on their finances over the next year…Half of UK adults— 27 million people—will have to cut their spending to cope with household costs. 1 in 4 people coming to Citizens Advice have some kind of debt problem”

and that 40% of them have dependent children.

That tells a tale not of a country where people are benefiting from the Government’s policies, but where inequalities are growing and families are suffering. Nowhere is that more the case than in the north-east, which, having contended with colossal cuts in the public sector and minimal investment, continues to have both the highest rate of unemployment and the lowest average weekly earnings in England.

Working people are already £1,600 worse off under the coalition Government than they were before the general election in May 2010, but that is exacerbated in the north-east by wages that are about £50 per week less than the UK average and almost £200 per week less than wages in London. Yet the Chancellor’s announcements yesterday do nothing to address this unfairness. While some will feel the marginal effect from the tweaks made to the personal tax allowance, thousands of hard-working and low-paid people across Teesside, striving to eke out a living for their families, will be even worse off as their limited incomes are stretched even further to meet rising energy, food and other bills. Many in my constituency simply earn too little to benefit from the Chancellor’s

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tax cuts, and can only dream of earning the £1,250 per month that can now be saved tax-free in ISAs, let alone being able to save this amount.

Let us not forget that while the Chancellor was making heedless efforts to encourage saving, Britain’s household borrowing is at a record high, equivalent to an average household debt of £54,000. So while the chairman of the Conservative party tediously patronised hard-working people by lauding minuscule cuts to the costs of beer and bingo, more families owe more money than ever before. This low-wage recovery means many have to deplete any savings they may have had, driving greater inequality and fuelling a growing demand for extra support—most worryingly, in the form of food banks.

Such naivety is just another demonstration of exactly how out of touch the Conservative-led coalition is with hard-working families. But too often the north-east is characterised precisely by the challenges that inequality poses, and not by the potential that exists in the region were it to be given the right opportunities to thrive and flourish. It is those opportunities that the Chancellor failed to deliver. Enhancing the mix of skills and knowledge within the regional economy, aligning them with those needed by businesses in the north-east, would be the first step to closing the skills gap.

While businesses such as Sembcorp on Teesside are managing to create jobs and recruit apprentices, many smaller firms struggle to share their expertise and skills owing to the lack of support they need to make a real impact. We have had some help from the regional growth fund money and an enterprise zone, and the Budget contains some welcome, albeit limited, positive news for energy-intensive industries on Teesside. But welcome as those things are, their value pales into insignificance in comparison with the support and investment for the north-east each year from 1997 to 2010. We really could have done with something in the Chancellor’s Budget to stimulate growth in the green economy on Teesside, an area that holds great potential both for growth and investment. Companies such as Air Products and INEOS are investing on Teesside, despite ongoing and tedious regulatory hurdles, but the Chancellor yesterday offered no incentive for others to follow suit. As a result, potential investors have been deterred and we have seen a large-scale investment slump from an all-time high of £7.2 billion in 2009 to £3 billion in 2012. This Budget comes back to one word: inequality.

4.24 pm

Paul Burstow (Sutton and Cheam) (LD): I wish to reflect on one or two significant changes that this Budget and the Government’s long-term strategy are delivering, and to look at how they impact on the businesses and the people in my constituency.

First, I welcome the further steps that have been taken on tax-free personal allowances. Some 39,000 people in my constituency will benefit from the £800 tax cut. In addition, my local council has frozen the council tax for the fifth consecutive year, which is good news for local families. None the less, we still need to go further. In due course, I hope we will be able to align the tax-free personal allowance with the national minimum wage, so that no one on the national minimum wage pays income tax.

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Secondly, I want to welcome the pension changes that were announced yesterday. The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) has his fingerprints all over those proposals. Pensioner security has been his goal for a very long time. Linking the basic pension to rises in prices or earnings or 2.5% whichever is the higher has delivered an extra £650 to 14,879 pensioners in my constituency. That feature of our pension system should be made permanent. It would help to guarantee the foundation on which individual retirement savings are built. I also welcome what my hon. Friend said in response to me earlier on when he made his statement.

That leads me to the radical change to the way in which people take their pensions. The change is the most radical for nearly a century, giving people greater choice on how to access their defined contribution pension savings. The current arrangements are complicated and leave pensioners feeling short-changed. By lifting restrictions on individuals who have made the right choice to save can empower people to plan for their later life. The changes reflect the longevity revolution that is taking place in our country. As life spans increase and healthy life expectancy rises, we need our pension system to adapt to support people in their third age.

The quality of the guidance available to people when taking decisions will be critical. The fact that this guidance will be free and face to face is good news. I hope Ministers will take the opportunity to join up later life planning. The way in which long-term care is paid for in this country introduces a duty to provide information and advice, including financial advice. It must surely make sense to ensure that people are presented with a rounded picture of their later life needs. We all want to plan for our third age of active retirement, but impartial guidance should also help us to plan for our fourth age of frailty, when we sometimes need support and care. I welcome what my hon. Friend said on that, too.

It is great news that the UK is forecast to grow faster than any other G7 economy in the first half of this year. Sustainable growth will come from a more balanced economy. We want to prosper from what we make and from our ability to translate scientific discovery into jobs and growth for UK plc.

In my constituency, we already have a world leader in the life sciences—the Institute of Cancer Research. The institute discovers more new cancer drugs than any other academic centre in the world, as well as generating more invention income per capita than any other UK higher education institution. My council’s Successful Sutton growth plan, which has already attracted £319 million of inward investment and created many more new jobs, will form the heart of an extraordinary life science campus. What makes that plan so exciting is that the institute shares its Sutton home with the Royal Marsden, which is one of the world’s best cancer hospitals. That ability to translate discoveries from the lab bench to the bedside and to operate a close collaboration between clinicians and scientists provides a huge competitive advantage.

Mr Heath: I am interested to hear what my right hon. Friend says about the investment in his constituency. It is exactly what the Science and Technology Committee, on which I serve, is looking for in terms of the correlation

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between original research and market-ready bioscience and high-tech solutions, which we can use both in this country and abroad.

Paul Burstow: My hon. Friend is absolutely right. The two organisations in Sutton have an exceptional working relationship, which makes the site unique in the UK and up there with the best organisations in the world, such as MD Anderson in Houston and Sloan-Kettering in New York. My right hon. Friend the Business Secretary is aware of these emerging plans, and I know that my right hon. Friend the Chief Secretary to the Treasury was very impressed when he visited the Institute of Cancer Research in January. The potential from the site is huge. There is space for life science businesses to cluster; 10,000 direct jobs; a £350 million contribution to the economy; and increased research income. These are huge opportunities and I hope that the Business Secretary and his colleagues in the Department will ensure that his officials fully engage with them so that we can realise the full potential of the project.

Let me end my speech by making some comments about housing. What was announced in the Budget was welcome, but I think it missed an essential ingredient—a focus on the fastest-growing source of demand for housing, people over the age of 65. There is a chronic shortage of the right housing options for people in the second half of their lives. Too often, moves in later life come as a result of a crisis rather than an attempt to fulfil aspirations for a better quality of life. The Help to Buy scheme and the rules governing the community infrastructure levy need to be reviewed to help grow the market for later life housing. The impact on the housing supply chain could be profound, freeing family homes, creating jobs in renovation and helping people to make the most of their third age.

In conclusion, there is more to be done, but the Government have ensured that growth is back, employment is rising, unemployment is falling and inflation is under control. The Government are doing the right thing and providing a sound platform for this country to move forward and that is why I support the Budget.

4.30 pm

Mr Steve Reed (Croydon North) (Lab): People in Croydon North were looking to this Budget to help them with the cost of living crisis that has hit them so hard since this Government were elected. Wages are down £1,600 a year since 2010, long-term youth unemployment remains unacceptably high and people are struggling with the Government’s VAT hike and failure to restrain energy price rises. They looked to this Budget for change, but I regret they found precious little.

Instead, the Budget simply ignored the real problems facing people in Croydon North. With the average national income around £26,000, very few working households have a spare £15,000 a year to invest in ISAs. The issues that concern them are how to put food on the table, how to pay the heating bills and how to stay in employment, but on the things that really matter there was precious little help on offer from the Chancellor yesterday.

There is a desperate housing shortage across London. Croydon North has extremely high numbers of people living in substandard overcrowded private rented housing and what is needed is an urgent increase in the building

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of affordable and social housing. The proposals for Ebbsfleet, although welcome, are just a drop in the ocean compared with what is needed.

One of the most painful of all the challenges facing Croydon North is the scandal of long-term youth unemployment. Week after week in this Chamber I watch Tory Ministers’ complacency about that issue. In Croydon North, more than 1,000 young people have been unemployed for more than a year. That figure remains unacceptably high and the statistic masks the tragedy of individual young people growing up to be told that the society around them thinks that they have nothing to offer. It is a waste of their talent and of their ability, of their present and of their future. A national house building programme at scale could have helped to provide the jobs that those young people need, but that opportunity, alas, was missed yesterday.

One of the most welcome proposals for my party is the youth jobs guarantee. What a difference that would have made to those young people’s self-esteem and dignity and what a crying shame it is for every unemployed youngster in Croydon North that this Government will not introduce it.

Hard-working people are not obsessed with beer and bingo, in the way the Tories like to caricature them. Instead, they care about jobs, homes, education, health and how to pay their ever-rising household bills. The Tories can put out condescending adverts as much as they like, but they cannot hide from the fact that people are worse off, not better off, after four years of Tory rule.

4.33 pm

Mr Tobias Ellwood (Bournemouth East) (Con): It is the afternoon after the day before. The metaphoric bunting has gone, the media have left Westminster Green and the Chamber and, indeed, the Galleries have emptied—but that just might be because I am on my feet. This is the point at which enough time has elapsed to appreciate the full impact of the Red Book. If the newspaper headlines, radio interviews and a very weak Opposition response are anything to go by, this Budget is standing up to scrutiny and is already being recognised as a significant statement of intent, building on this Government’s long-term economic plan of reducing the deficit, creating more jobs and making people more financially secure.

The Chancellor began his speech by reminding us of the scale of the economic mess we inherited, caused by banks lending funds they did not have to people who could not afford it in ways they did not understand. It has taken a new Government completely to reform the regulatory system and to introduce the necessary changes to make Britain competitive again. Unlike the predictions from the Opposition, this was achieved without any double or triple-dip recessions in sight, as my hon. Friend the Member for Gloucester (Richard Graham) said.