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Business of the House
11.37 am
The First Secretary of State and Leader of the House of Commons (Mr William Hague): With permission, I should like to make a statement on next week’s business:
Monday 23 March—Conclusion of the Budget debate. I expect my right hon. Friend the Prime Minister to make a statement following the European Council.
Tuesday 24 March—Consideration of a Business of the House motion, followed by consideration of Lords Amendments to the Recall of MPs Bill, followed by consideration of Lords Amendments to the Small Business, Enterprise and Employment Bill, followed by a motion relating to section 5 of the European Communities Amendment Act 1993, followed by a motion to approve statutory instruments relating to counter-terrorism, followed by consideration of Lords amendments.
Wednesday 25 March—All stages of the Finance (No. 2) Bill, followed by motion to approve a statutory instrument relating to terrorism, followed by consideration of Lords amendments.
Thursday 26 March—Consideration of Lords amendments, followed by an opportunity for Members to make short valedictory speeches as recommended by the Backbench Business Committee. The House may also be asked to consider any Lords messages which may be received. All consideration of Lords amendments announced for next week will be subject to the progress of business. The House will not adjourn until Royal Assent has been received to all Acts.
This is the last weekly business statement of this Parliament. Although I will be seeking to catch your eye on several occasions next week, Mr Speaker, now seems an opportune moment to thank the shadow Leader of the House for her good humour, her support for reform of the House and her commitment to the interests of the House. We worked together on many bodies, such as the House of Commons Commission, and she has always been a constructive colleague. I have enjoyed working with her.
I would also like to thank my right hon. Friend the Deputy Leader of the House for his dedication and companionship, particularly on Thursday mornings. I praise his industry, because since becoming Deputy Leader of the House in September 2012, he has clocked up more than 114 legislative hours dealing with six different Bills. I wish him well. I thank other colleagues for their assistance and often their patience, particularly those who have regularly attended business questions and given close attention to our proceedings.
11.39 am
Ms Angela Eagle (Wallasey) (Lab): I thank the Leader of the House for announcing the business for the final days of this Parliament, and, of course, for his extremely gracious and entirely typical thanks and tributes not only to me, but to all Members. I am sure that next week, during the “valedictory addresses”, we shall have an opportunity to repeat some of the graciousness.
I must say, however, that despite the heroic efforts of the Leader of the House since he took the reins, this is a Parliament that will be remembered for being so devoid of business in its second half that “zombie Government”
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has entered the political lexicon, and so badly managed that it has lost two MPs to UKIP, seven Cabinet Ministers, and no fewer than 103 votes in the House of Lords. No wonder the Tory Chief Whip cannot even organise his way out of a toilet.
Yesterday, we heard a Budget that people will not believe from a Government whom they do not trust. No amount of rhetoric can mask the Chancellor’s failure. He told us that the deficit was the most important thing, and promised to eliminate it by the end of this Parliament. He has failed. He claimed that we were “all in this together”, but he has given us tax cuts for millionaires and a bedroom tax for the most vulnerable. We have had tax breaks for hedge funds from a party that is now a wholly owned subsidiary of the tax avoiders, and, for the first time since the 1920s, working people are worse off at the end of a Parliament than they were at the beginning.
What did the Chancellor offer when he told us to choose the future? Extreme and dangerous cuts, the deepest for 50 years, which the independent Office for Budget Responsibility has described as a “rollercoaster”. It is no wonder that the Chancellor mentioned Agincourt more than he mentioned the NHS. It has been calculated overnight that he spent £80 million on bad jokes in his Budget speech. I can give you this promise, Mr Speaker: my jokes will always be cheaper than that.
It is no surprise that this week one Tory MP has been caught desperately trying to hide his true identity. He has come up with a cunning disguise, and has taken on a whole new persona. I am not talking about Michael Green. This week, the hon. Member for Croydon Central (Gavin Barwell) contacted constituents, begging them to endorse him to their families and friends. So confident is he about the Government’s stunning record that he said:
“it'll be much more effective if it doesn’t mention the Conservative Party”
Meanwhile, the Tory party chair, after years of denial and threatening to sue one of his own constituents, has finally admitted that he did, after all, have a second job while serving as a Member of Parliament. He created a brand-new alternative to “economical with the truth” when he apologised for “over-firmly” denying the facts. After five years, there we have it: the Liberal Democrats misadvise themselves, and the Tories over-firmly deny.
As this is the last session of business questions during the current Parliament, I thought it would be remiss of me not to take a few moments to poke fun at the Liberal Democrats, but, given what we have just heard from the Chief Secretary, I think that they have done it all by themselves. The Chancellor’s apprentice, the mini-me of the Treasury, came to the House to deliver his very own faux-Budget statement—and what did he say? That today he disagrees with everything that he signed up to yesterday. Apparently, he is so determined to feel important that he had his very own yellow Budget box constructed, and—absurdly—posed with it at the weekend. However, I hear that he has already taken it to a Liberal Democrat fundraiser and sold it off to the highest bidder, much like his principles. I understand that he got fifteen hundred quid for it.
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Meanwhile, the former president and aspiring next leader of the Liberal Democrats, the hon. Member for Westmorland and Lonsdale (Tim Farron), tried to boost morale at the party’s spring conference by saying that he thought they might lose half their seats, and that they deserved a mark of just two out of 10 for their time in government. I think that that is a bit generous.
Let me take this opportunity to pay tribute to the Leader of the House, who is retiring from this place in just a few days’ time after 26 years of service. He has gone from blond bombshell to slick statesman. He commands respect across the House. Over his career he has befriended celebrities, he has written books, he has travelled the world, he has led his party, and he has been a hard-working and effective Leader of the House whom I have enjoyed working with. Now that’s not bad for someone who was once rejected for a job as a special adviser by Margaret Thatcher, who wrote on his application form, “No, no, no.”
I know the right hon. Gentleman is off to a new house in Wales, which I gather has 10 bedrooms, 10 bathrooms, and I am not sure how many kitchens—perhaps he will tell us. All I can say is that he is lucky a Labour Government will repeal the bedroom tax, although he may be less happy about our plans for a mansion tax.
Yesterday the Chancellor laughably claimed that this Government were helping the north, but what he does not realise is that he is about to lose the only northern powerhouse the Tories have ever had.
Mr Hague: I am grateful for the hon. Lady’s touching remarks. As last week, I will not join her in making fun of the Liberal Democrats; I pointed out that I am going to wait a little while for that. I have spent a lifetime making fun of the Liberal Democrats, but I have had a five-year interregnum, and I am looking forward to it coming to an end. Since I will be released from this place anyway, I will be able to join in, but they are deeply valued colleagues—for another few days anyway—and I very much meant the tribute I paid to my right hon. Friend the Deputy Leader of the House.
The hon. Lady asked about various matters including referring again—we have debated this before—to the Chief Whip and his experiences in toilets. I have explained that it is an essential part of the duties of a Chief Whip to know who is lurking in there at any one time.
I want to take the hon. Lady up on what she said about this Session of Parliament, because I believe when we come to the end of it next week a great deal will have been achieved: the Infrastructure Act 2015 that provides a nearly £4 billion boost to the economy; the small business Bill that will help businesses get credit from banks and ensure they can expand; the Pension Schemes Act that gives people freedom and security in retirement; the Criminal Justice and Courts Act that allows us to properly punish serious offenders; the Modern Slavery Bill, which will be a landmark piece of legislation; and the Childcare Payments Act that helps more parents with the cost of child care. These are all from this Session of Parliament. That is not a zombie Session of Parliament; that is real, constructive legislation that is of immense assistance to many people in this country.
I have all the great respect for the hon. Lady that I spoke of earlier, but I think she may have written part of her remarks before the Budget, because she said people
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would be worse off at the end of the Parliament than they were at the beginning of it, but as we now know from the Office for Budget Responsibility one of the achievements of this coalition—Conservatives and Liberal Democrats—will be that on average households will be £900 better off in 2015 than they were in 2010. So the script will have to be changed, albeit at the very end of the Parliament.
Talking of the northern powerhouse, I am very proud that, as the Chancellor pointed out yesterday, more jobs are being created in Yorkshire than in the whole of France. That is not remotely a surprise to those of us from Yorkshire, but it is part of the achievement of this Government that employment is at its highest since records began, and that 1,000 more jobs have been created every day under this Government. One particularly striking aspect of yesterday’s figures is that the rise in youth employment in the last year has been higher than in the whole of the rest of the European Union put together. It is very rare for a Government at the end of a Parliament to be able to say that—very rare indeed—and the Opposition, who voted for the charter for budget responsibility but are now unwilling to maintain any spending discipline, have to explain where the tax rises are going to come from in their programme. There will be a great deal of suspicion that there will be large hidden tax rises from a Leader of the Opposition who has that large hidden kitchen he did not want to speak about.
Such issues will be considered in the Budget debate, continuing until Monday, and in the general election campaign. We will do everything we can in the meantime to bring the business of the House next week to an orderly conclusion.
Sir David Amess (Southend West) (Con): My right hon. Friend and I were both born on 26 March but a decade apart. I wish him well, but I do think he is retiring at too young an age.
Will my right hon. Friend please find time for a debate on the Scrap Metal Dealers Act 2013? My constituents Nick and Jane Winfield feel that all manner of people are collecting and selling scrap metal without a licence, and that something needs to be done to ensure that the law is being enforced.
Mr Hague: This is a very important issue that has affected rail services, and war memorials have been desecrated and church roofs damaged. We have taken action, as my hon. Friend knows, and there is indeed the 2013 Act. The licensing scheme is administered by local councils, and we fully expect them to take action where scrap metal dealers are found to be unlicensed or are failing to comply with the Act. I hope that is of some reassurance to my hon. Friend. I do not think it will be possible to add a debate about that issue into the remaining few days of this Parliament.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): I have known the right hon. Gentleman for a long time, and on Yorkshire issues we have got on very well indeed. I shall certainly miss the double act, which is one of the best I have seen in business questions over the years.
We have had the Budget and we are debating it, but I urge the right hon. Gentleman to give even more attention in the remaining few days to the reality out there:
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museums, libraries and art centres are closing, as are hospitals—we are in a dreadful state. Is there an opportunity in the coming week to reconnect with the people out there, because they are not connecting with the Budget we heard yesterday?
Mr Hague: It is sad that the double act is coming to an end—although my jokes might be more expensive than those of the shadow Leader of the House.
I point out to the hon. Gentleman that part of the Budget debate can of course be about the matters he has raised. My right hon. Friend the Secretary of State for Communities and Local Government will open tomorrow’s Budget debate, for instance, so the hon. Gentleman will have a further opportunity to raise those matters. He talks about the reality out there. The reality is that there are more people in work than ever before, and that we have the fastest growing of all the major industrialised economies. That, of course, allows us to have strong public services in the future, and without a strong, growing economy, we cannot have the public services the hon. Gentleman is talking about.
Philip Davies (Shipley) (Con): May we have a debate on election conduct? As the Labour party clearly has nothing positive to offer, I fear that this will be the dirtiest election campaign on record. My right hon. Friend may be aware of some of the disgusting smears and lies that have been put out about our hon. Friend the Member for Witham (Priti Patel) by the Labour candidate. Does my right hon. Friend agree that although it is perfectly reasonable for political parties to point out the threats, as they perceive them, posed by the other parties being elected to government, personal smears, attacks and abuse of individual constituency candidates are not acceptable and bring politics into disrepute? Perhaps a debate next week in advance of the forthcoming general election would allow all the political parties to maintain that they will not tolerate that kind of behaviour.
Mr Hague: I cannot offer a debate, but my hon. Friend is absolutely right: we believe in vigorous political debate in our elections, but I have seen comments made about my hon. Friend the Member for Witham that are offensive, malicious and often false, and which will be particularly offensive to women and to people of Asian origin. It is time the Labour party took that in hand in Witham.
Keith Vaz (Leicester East) (Lab): I join others in paying tribute to the Leader of the House. He has clearly been one of the most outstanding parliamentarians, certainly in my time in the House. I played a small part in his career when I gave him his first job, as secretary of the all-party footwear and leather industries group, and look how well he has done!
Next Thursday will be a very important day in the history of Leicester when the interment of Richard III takes place. If the right hon. Gentleman wants a ticket for the occasion, I can try to arrange one for him. May we have an urgent look at the criteria for boroughs and cities being permitted to use the title “royal”? Leicester must surely be entitled to use it—as Kensington and Chelsea, and Greenwich, have done—and to become a royal city, given our new connection with royalty.
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Mr Hague: I am grateful to the right hon. Gentleman for his kind words. The role I played as secretary of the all-party footwear and leather industries group was so crucial that I have completely forgotten it, actually. But it played a very important part in my career in the House a quarter of a century ago—
Sir Bob Russell (Colchester) (LD): It was a footnote.
Mr Hague: It was indeed a footnote to my career. I thank my hon. Friend for that.
There are periodic opportunities and competitions for towns to compete for city status and for cities to request an increase in their status. I do not think that that will be able to happen in the coming week, however. Leicester will have many important claims for advancing its status but I do not think that the connection with Richard III would be decisive, given that he lost the battle of Bosworth and that the royal line that flowed from him was rather weakened as a result.
Greg Mulholland (Leeds North West) (LD): Will the Leader of the House welcome the new manifesto for change which calls for justice for the victims of criminal driving? This is a hugely important issue, and a number of changes need to be made in order to bring justice to many people. I should like to thank the many people who have contributed to the process. May we have a debate on this new manifesto, which is backed by Brake and other organisations as well as by a number of MPs from both sides of the House, so that Parliament can discuss how we can get the changes that we need?
Mr Hague: I welcome the continuing debate on this matter and on the many concerns that have been raised. The Criminal Justice and Courts Act 2015 has increased the maximum penalty for causing death while disqualified from two to 10 years, and created the new offence of causing serious injury while disqualified, which carries a maximum penalty of four years. That does not mean, however, that all the concerns have been dealt with. This is a welcome campaign and manifesto, and I will certainly ensure that ministerial colleagues are made aware of my hon. Friend’s work, alongside the Government review. Although there is not time to debate the matter further in this Parliament, I am sure that it is an issue that the next Parliament will want to return to.
Jim Fitzpatrick (Poplar and Limehouse) (Lab): I should like to associate myself with the tributes that have been paid to the right hon. Gentleman and to my hon. Friend the Member for Wallasey (Ms Eagle), his shadow.
I do not expect the Government to comment on the outcome of elections in other countries, but will there be a statement on Premier Netanyahu’s announcement that he will not support a two-state solution? Might the Prime Minister refer to it at the European Council and then comment on it in the House next week? The two-state solution has been the policy of the UK, the US and the EU for some time, and the statement by the Israeli premier must have disappointed the Government as much as it has disappointed so many people in this country.
Mr Hague:
Support for the two-state solution is a very important part of our policy on the middle east peace process, and it is common across the House of
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Commons. I did a good deal of work on this as Foreign Secretary, although the greatest amount of work has been done in recent times by Secretary John Kerry and I salute all the work that he has put into the process. I have often said in the House that time was running out for a two-state solution and, sadly, that remains the case. The best opportunity to ask Ministers about this will be when my right hon. Friend the Prime Minister gives a statement to the House next Monday or at Prime Minister’s questions next week, when this would be a perfectly normal thing to ask him about.
Julian Smith (Skipton and Ripon) (Con): The Leader of the House is not only one of the finest Foreign Secretaries and parliamentarians that Britain has ever had but a much loved and respected local North Yorkshire MP. May we have a debate about North Yorkshire, its people, its businesses, its beauty and its beer?
Mr Hague: Everybody is being very kind, but none of this will persuade me to stay. I am grateful to my hon. Friend and neighbour for all his support and co-operation on North Yorkshire issues. There would be a great deal to say in a debate on North Yorkshire, including about the beer. I understand that a beer has been launched in my honour called Smooth Hague and I have already tasted it. We could debate all those things, and I hope, if I manage to catch your eye, Mr Speaker, at the end of the valedictory debate next week, to say a few sentences about the great people of North Yorkshire and what a privilege it has been to represent them over the past 26 years.
Chris Bryant (Rhondda) (Lab): I first met the Leader of the House when I was 18 and I went to his 21st birthday party, which I remember was subtitled “wine, women and song”, so it is with mixed emotions that I congratulate him on leaving the House. We will miss him, but we are all looking forward to some wonderful new books, as he is a very fine writer. He says that he will keep up his campaign against the use of sexual violence in war and we all praise him for that, but who knows, perhaps he will appear down the corridor in a few weeks’ time in another guise.
May I ask him about the use of LIBOR fines announced yesterday? I gather that more announcements are coming today. Of course we support the Government’s announcements on how they are being given out, but it feels a bit like pork barrelling at the moment, as Treasury Ministers, without any formal process, have just been doling out cash to organisations that have not even asked for it. Would it not be better to go through the Arts Council or the Heritage Lottery Fund?
Mr Hague: I am grateful to the hon. Gentleman, whom I have known since he was 18, when he was a Conservative—[Interruption.] I hate to break the news to the Opposition, but he was a member of the Oxford university Conservative association, albeit in favour of PR—
Chris Bryant: You were in favour of PR.
Mr Hague: No, the hon. Gentleman was in favour of PR, which made him rather a suspicious character in the eyes of the rest of us.
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Mr Hague: I had already given up my support for proportional representation at that point, but yes, I have known the hon. Member for Rhondda (Chris Bryant) for a very long time and I am grateful for his remarks. He mentions my work on preventing sexual violence, which I will continue outside this House, but that is another illustration of the use of LIBOR money. Last month, I was able to announce £1 million of that money going to the London School of Economics to create a centre for women, peace and security. My right hon. Friend the Chancellor has just joined us, and I do not think that it is fair to say that that is pork barrel use of money. That is an example of how well used the LIBOR funds are. They are, of course, available only on a temporary basis, so setting up a whole structure to disburse them is probably not the way forward, but I will be able to pass on to the Chancellor what the hon. Gentleman has said.
John Thurso (Caithness, Sutherland and Easter Ross) (LD): I join colleagues in paying tribute to the Leader of the House and the shadow Leader of the House for the work they have done, on the House of Commons Commission in particular. Much has been achieved together and it has been great working as part of that team.
Will it be possible to have a debate on the provision of communication infrastructure by BT? It has been suggested recently that that should be hived off from the company. In the highlands of Scotland, in my constituency, I have received 45 complaints, such as that from John Sinclair of Caithness Creels, who has been waiting for more than three weeks to get broadband. The residents of Lothmore have been waiting for up to six weeks to be reconnected. There is a clear shortage of engineers, and BT seems to regard that as perfectly acceptable. I wrote two weeks ago to the chairman, Sir Michael Rake, pointing out the potential reputational damage to BT; I never received an answer from him. The high-level complaints team has however told me that it will look at the issue, but that it might take some time. That is not acceptable from the provider of a national infrastructure and I believe we should be concerned about that.
Mr Hague: I am grateful to my right hon. Friend and pay tribute to the tremendous work he does for this House, which I have seen at close quarters. We have been able to work together very well in the House of Commons Commission, so I thank him very much for that. He raises an important issue. The Government of course have a very strong record on the development of superfast broadband around the United Kingdom, particularly in rural areas, but he is right about the difficulty in some of the remotest areas. I see that in North Yorkshire, and he highlights the difficulties in the extremely remote areas that he represents. Although there is not time for a debate, I think he has succeeded in raising the matter on the Floor of the House, and I hope that BT will take that very seriously and attend quickly to the matters affecting his constituents.
Paul Flynn (Newport West) (Lab):
The Leader of the House will be remembered in Wales as one of the most agreeable alien governor-generals we have had, in a period when he had the great good fortune to meet the
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wonderful Welsh woman who was to become his wife. Can he add further lustre to his reputation today by looking at a profoundly anti-democratic measure that was blocked by several voices last night? It would remove from the local authorities their powers to control drilling and the dumping of toxic waste, including nuclear waste, in their country. Would it not be an affront to democracy if that measure passed through the House on a deferred decision by a thinly attended House? Should the measure not now be withdrawn, for consideration by the next Parliament?
Mr Hague: I am grateful for the nearest thing to a ringing endorsement from the hon. Gentleman. I have fond memories of being Welsh Secretary. The Prime Minister who appointed me to that role, Sir John Major, asked me to take Wales to my heart. When, a year later, I married my private secretary, he said, “I think you are taking this a little bit too literally now.” Of course I have been deeply fond of Wales ever since.
On the measure the hon. Gentleman refers to, we must follow the procedures with all matters before the House, including the large number of orders in the remaining few days of the Parliament, so I cannot offer him an additional debate, but he will be able, as ever, to use every possible procedure of this House—he is very skilled at that—to make his views known. I am sure he will continue to do so on that matter.
Dr Matthew Offord (Hendon) (Con): My first question in this House resulted in £2 million being awarded to Jewish schools in my area to enforce their security. Yesterday, I was pleased to present the petition signed by more than 2,000 people seeking that sum again to be renewed. Will the Leader of the House take this opportunity to confirm the Prime Minister’s announcement last night that not only has that money been extended and increased, but that it will now also cover independent schools, synagogues and Jewish cultural centres such as the JW3 centre on Finchley road?
Mr Hague: The Jewish community is a vital part of British life. Although we meet additional security costs at state-funded Jewish schools, we recognise that a wide range of independent establishments face the same risks, as my hon. Friend has said. We are therefore widening eligibility for the grant to cover those schools and colleges, so that their pupils and students can have the same degree of security as those attending state schools. The new package announced by the Prime Minister is in addition to the existing Department for Education grant, which will also continue in the next financial year. So we remain staunchly committed to tackling anti-Semitism wherever it occurs, and I can confirm the announcement, as my hon. Friend says.
Ms Karen Buck (Westminster North) (Lab):
As a former political child star, the Leader of the House will, I am sure, join me in wanting today’s young people to grow up informed and active participants in the political process. Will he find time for a debate on how we might do more to encourage young people to become involved? Pending that, will he join me in endorsing today’s BBC school report news day, which has involved 1,000 schools and 30,000 teenagers at schools in making the news? The Westminster and Paddington academies in my constituency are taking part, as are schools right across
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the United Kingdom. Does he think that is one important way in which we can get young people actively involved in citizenship, news making and understanding politics?
Mr Hague: Yes, I absolutely join the hon. Lady in welcoming that initiative. Indeed, my right hon. Friend the Deputy Leader of the House will be marking this day with one of his own schools later today. It is important that all parties keep up the work to engage and inform young people. The new education centre, which you, Mr Speaker, have always strongly supported, will be available to encourage that work. One of the most impressive moments of the past year for me as Leader of the House was when the Youth Parliament gathered in this Chamber. Its representatives set quite a good example to all of us who are not so youthful, and we should be greatly encouraged that, in this country, we have great young people who will be the leaders of the future.
Mr Speaker: I shall communicate colleagues’ shared enthusiasm for youth participation when I meet the students of Holland Park school this afternoon. Those students will be comforted and reassured to know of the esteem in which their involvement is held.
Sir Bob Russell (Colchester) (LD): I am confident that I speak for all members of the other coalition party when I pay tribute to the Leader of the House and endorse the comments made by the shadow Leader of the House. The right hon. Gentleman is a remarkable parliamentarian who will be missed in this House. Perhaps he will find a perch at the other end.
Is there time to have a quick debate on the geography of the United Kingdom? The reason I ask is that the Conservative party has issued a leaflet in my constituency, which has Colchester on the coast. Mr Speaker, you will be aware that Colchester is on a tidal river. Although the Conservatives may be at sea, I am not.
Mr Hague: As always, I am grateful to my hon. Friend for his remarks. I doubt that we will find time in the remaining five days for a debate on the geography of the United Kingdom. How close to the coast anywhere is in the United Kingdom depends on the scale of the map. If it is small enough, we are all on the coast; this is an island. I am sure that he will bear that in mind.
Debbie Abrahams (Oldham East and Saddleworth) (Lab): May I reiterate the tributes to the Leader of the House? I wish him, very sincerely, good luck for the future. I was particularly delighted with his remarks about the Office for Budget Responsibility. I wondered whether they meant that the Government had had a change of heart over the OBR scrutinising manifesto spending commitments. If they have, will he enlighten us?
Mr Hague:
I am grateful to the hon. Lady for her remarks about me. As for the OBR, it is an important innovation that was introduced by my right hon. Friend the Chancellor. There was no such independent auditing of Government Budgets and statements before. It has produced an extensive report that goes with the Budget, but it would be in some difficulty assessing the policies
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of the Labour party, because we do not know what all the tax rises would be in order to fill the gaping hole now left in its finances. That is something that it will have to explain.
David Morris (Morecambe and Lunesdale) (Con): Will my right hon. Friend indulge me while I say that he is the finest Prime Minister we never had? I feel that I have grown old with him, because he has been there on the mantelpiece for successive elections since 1997. Talking of growing old, my right hon. Friend the Chancellor, who has just taken his place, said yesterday that we should provide for people in their old age, as they have paid tax on what they have earned. In the future, could we have a debate on council tax reduction and exemption for the over-75s?
Mr Hague: I am grateful to my hon. Friend, whom I have known for a long time. He says that we have grown old together, but I do not feel very old. I have enjoyed all the work that we have done together over the years. He is quite right about the importance of council tax and other fixed costs for older people, which is why it is so important that, under this Government, councils have had the opportunity to freeze council tax for the entire period of this Government, whereas it doubled under the 13 years of the previous Government. That freeze, the reduction in the scheduled increases in fuel taxation and now falling energy prices are major benefits for older people.
Mr Philip Hollobone (Kettering) (Con): I bring good news from Kettering. International food manufacturer Alpro has opened its new extension to its UK production facility at Burton Latimer. Alpro’s sales in the UK are increasing by 25% year on year, and its £30 million investment will double production in its drinks made from almonds, hazelnuts, soya, oats and coconut, and create 50 additional jobs for the local economy. That investment is a vote of confidence not only in the UK, but in the local economy in Kettering. Before Parliament is dissolved, may we have a statement from Her Majesty’s Treasury about how much foreign investment this country has attracted over the past five years as a result of the success of this Government’s long-term economic plan?
Mr Hague: My hon. Friend has been absolutely assiduous, particularly in recent months, in bringing good news to the House from Kettering and in creating, through his work as an MP, great good news for Kettering. He has missed only one week, which was, I think, last week. His absence caused much concern about Kettering, but I know that he was working on additional good news. Again, Kettering is a microcosm of what is happening in the country as a whole with the remarkable growth in employment, of which I spoke earlier. He is right about the importance of foreign investment, which has, in the UK over the past five years, far outstripped foreign direct investment in other countries in the European Union, and it will continue to do so provided that we stick to a long-term economic plan.
John Glen (Salisbury) (Con):
Last week, the deposed elected President of the Maldives, Mohamed Nasheed, was sentenced to 12 years in prison by a corrupt court. Although it is believed that he is safe in Dhoonidhood, it is expected that when he is moved to Maafushi island,
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there will be real concerns for his safety. Will my right hon. Friend ensure that the Foreign Office is doing all it can to highlight the concerns of Nasheed’s supporters, and can a statement be made to the House about sanctions and whether they should be taken against this much misunderstood set of islands?
Mr Hague: The Government are deeply concerned about the sentencing of former President Nasheed of the Maldives. We have called on the Maldives to follow due legal process. The Foreign Office Ministers were the first to make a strong statement, making it clear that we are monitoring the case closely. We are pressing the Government in the Maldives to give international observers access to any appeal hearing and to allow them to visit the former President in prison. We continue to urge calm across the country, to encourage political parties to act with moderation and to appeal to the Government of the Maldives to ensure that they work within the bounds of the law.
Adam Afriyie (Windsor) (Con): It has been a privilege to serve with the Leader of the House, and I appreciate the advice that he has given me over the years. I wish him a wonderful retirement, which I am sure will be as energetic as his time here in Parliament.
In Windsor and across the country, unemployment is at the lowest level that I have ever seen, which means that young people are getting livelihoods and life chances that they have not seen for a very long time. That has been driven by private sector businesses competing with each other in a very enterprising way. They have been set free by the pro-enterprise policies of the Government. May we have a debate on how markets work, largely for educational purposes for the Opposition party?
Mr Hague: That is not a bad idea. I am grateful to my hon. Friend for his remarks about me. He is quite right about employment. I pointed out earlier how the rise in youth employment over the past year has been greater than in the whole of the rest of the European Union put together. We have also seen in this Government more than 750,000 new businesses created in the United Kingdom. We have a strong economic future ahead provided that we continue to follow a long-term plan. I hope that my hon. Friend will take the opportunity of the Budget debate—[Interruption.] Oh, he has already done so. He has spoken in the Budget debate and so has already been able to contribute to the education of the Opposition, but they clearly need more educating. As the shadow Chancellor has just arrived, they could do with a bit more educating in the next half hour.
Rehman Chishti (Gillingham and Rainham) (Con):
As a relatively new Member, may I say to the Leader of the House that it has been an immense privilege to see
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not only an outstanding parliamentarian, but someone with immense integrity and humour?
This week the first council houses to be built in Medway for 40 years were officially opened in Gillingham, and last month MHS Homes in Medway was shortlisted for a UK housing award for its construction of shared ownership apartments in Rainham. Will he join me in wishing MHS Homes every success for the award ceremony, and may we have a statement on the excellent work that this Government are doing to build more homes?
Mr Hague: I am grateful to my hon. Friend for his comments, although it is getting a bit embarrassing—I am beginning to think that I might have died. Of course, had I died, hopefully I would not still be here. He makes an important point about affordable homes. Our affordable homes programme is on track to deliver 170,000 new, good-quality and affordable homes, and over the next Parliament we will build more of those than were built in any equivalent period in the past 20 years. That includes a £400 million rent to buy scheme for up to 10,000 homes. That is very important work that the Government have done, and I know that my hon. Friend has done great work to encourage such developments in his constituency.
Jeremy Lefroy (Stafford) (Con): May I associate myself with the tributes to the Leader of the House and the shadow Leader of the House and wish the Leader of the House a very long life? [Interruption.] Of course, I wish that also for the shadow Leader of the House.
Many of my constituents are facing problems with blight because of High Speed 2. Although there is an exceptional hardship scheme, which I must say in some cases works reasonably well, some people, particularly those who have difficulty negotiating with the scheme or who might have real personal difficulties because of illness or disability, find this a very troubling time, and I believe that sometimes they end up with a less than satisfactory outcome. May we therefore have a debate on ensuring that the compensation for people who have been put in that position through no fault of their own is full, fair and speedy?
Mr Hague: I am grateful to my hon. Friend for his remarks. He raises an issue that of course is very important to his constituents. As he will be aware, the High Speed Rail (London – West Midlands) Bill is receiving painstaking consideration, and that will continue into the new Parliament, so there will be further opportunities to raise those matters. They are matters that would naturally fall to Adjournment and BackBench business debates, but no more of those are available in this Parliament. However, he will be able to pursue the matter in the next Parliament, to which I am confident he will be returned.
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Points of Order
12.23 pm
Debbie Abrahams (Oldham East and Saddleworth) (Lab): On a point of order, Mr Speaker. As you will be aware, for over 18 months I have been looking into the inappropriate use of sanctions by the Department for Work and Pensions. At a Select Committee hearing on 4 February, I questioned the Minister for Employment and one of her officials on peer reviews undertaken by the Department of cases in which claimants have died. I asked whether there were any instances in which DWP actions were considered inappropriate or incorrect. I also asked about their association with sanctions. The answers I was given were inconclusive and opaque. I have since tabled written questions on the same matter, but again I received responses that bore no relation to the questions. Given that Parliament is due to be dissolved in the next few days, I seek your advice on how I can get answers to those very important questions.
Mr Speaker: I thank the hon. Lady for giving me notice of her point of order. She will understand that the content of Ministers’ answers, whether in Select Committees, in written answers or on the Floor of the House, is not a matter for the Chair. That said, I understand her frustration on the subject. The shortness of time before Dissolution limits the opportunities for her further to pursue the matter. However, the deadline for tabling a question for written answer on a named day is next Monday, so she still has a little time. Eyes can be kept on the matter. In the meantime, she has at least succeeded in putting her concern on the record.
Mr Peter Bone (Wellingborough) (Con): On a point of order, Mr Speaker. This morning I visited Sir Christopher Hatton school for a debate with young people. In fact, five years ago I did the same thing, and out of that came a parliamentary candidate, Tom Pursglove, who is fighting in Corby. I have a problem with the sitting times of the House, because as a result of attending that debate I was unable to get here in time for business questions. Had I done so, I would have been able to pay tribute to the Leader of the House for all that he has done and for the way he has answered questions absolutely brilliantly and not entirely to my satisfaction. I could also have paid tribute to the shadow Leader of the House. Is there any chance that the sitting hours of the House could be looked at again?
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Mr Speaker: Anything is possible, but in the meantime, as the puckish grin on his face eloquently testifies, the hon. Gentleman has found his own salvation.
Chris Bryant (Rhondda) (Lab): On a point of order, Mr Speaker. You have already referred to the fact that this parliamentary Session is coming to an end and that it is difficult for hon. Members to get replies to questions. I think that you were in the Chair on 4 March when I asked the Financial Secretary to the Treasury whether he could confirm the figure, which the Conservatives had announced on 5 January, of £83 million for the cuts to Arts Council England’s budget, which would start in April. He undertook to write to me at the time, but he has still not done so, despite the fact that I also wrote to him on 4 March. Would it be in order for you to encourage the Financial Secretary to make sure that he replies to all correspondence, particularly on undertakings he has given, before Dissolution?
Mr Speaker: I have no control over the matter, but it is a very simple ethical principle that people should honour their commitments, whether in respect of the House of Commons or elsewhere. If a Minister has committed to write to the hon. Gentleman, either stating explicitly that the letter would be sent before Dissolution or giving the strong impression that it would be, it just seems to me to be axiomatic that that should happen, and it would be extraordinary if anybody were for a moment to suppose otherwise. But I know the hon. Gentleman, and he does not let go, so I have no doubt that he will persevere on the matter in all manner of ways until he receives some satisfaction.
Bill Presented
Confiscation Orders (Sentencing and Offence) Bill
Presentation and First Reading (Standing Order No. 57)
Keith Vaz, supported by Nicola Blackwood, Dr Julian Huppert and Yasmin Qureshi, presented a Bill to provide that payment of the recoverable amount determined in a confiscation order by a court must be included as a component of a custodial sentence; to provide that non-payment of the recoverable amount be a criminal offence; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 27 March, and to be printed (Bill 191).
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Ways and Means
Budget Resolutions and Economic Situation
Amendment of the Law
Debate resumed (Order, 18 March).
(1) That it is expedient to amend the law with respect to the National Debt and the
public revenue and to make further provision in connection with finance.
(2) This Resolution does not extend to the making of any amendment with respect to
value added tax so as to provide–
(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for any relief, other than a relief that–
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.
12.27 pm
Ed Balls (Morley and Outwood) (Lab/Co-op): It is an honour to open today’s Budget debate. Less than 24 hours after the Budget statement, the truth is becoming clear. For all the Chancellor’s hubris, yesterday’s Budget has changed nothing for working people in our country. He spent an hour telling people that they have never had it so good, but working people are still, on average, £1,600 a year worse off after five years of the Tories. Our national health service is still in crisis, but he had nothing to say about the NHS.
The Chancellor started the day with plans for extreme spending cuts, and he ended the day with plans for extreme spending cuts: cuts to spending even bigger in the three years after the election than those of the past five years; deep cuts that go way beyond balancing the books; and deep cuts that can be delivered only by another Tory rise in VAT or by putting our NHS at risk. It was a Tory Budget from a Tory Chancellor who gives with one hand and takes much more with the other—an out-of-touch Budget that made twice as many references to Agincourt as it did to our NHS.
I will examine all the Chancellor’s claims and set out the truth behind the spin and hubris, but first I want to set him straight on one issue. I applaud the £1 million he announced to commemorate the battle of Agincourt, but before he goes any further with those plans I have to correct his rather shaky understanding of the battle. I know he has a degree in history, and that I have a mere A-level in mediaeval history, but I suggest he stick to the period he knows. For a start, the Chancellor should be aware that not a single Scottish soldier fought on the French side at Agincourt. Indeed, if he reads Shakespeare’s version of the battle, he will see that there were representatives of Scotland, Wales and Ireland, all fighting as captains in King Henry’s army.
The story of Agincourt was one of an arrogant and complacent king who, rather than fight the battle himself, sent his weak and ineffective right-hand man to defend an impossible situation. He got his tactics wrong, he
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lost control of the situation, and he became bogged down in mud. He was no match for the stout yeomen on the other side. They may have lacked money, horses and noble blood, but they outfought their opponents on the battlefield. We stout yeomen will be happy to join in the commemorations of Agincourt. As fans of hand gestures, if anyone can think of any famous hand gestures traditionally associated with Agincourt, we will be happy to use them towards the Chancellor again and again at every stage of this debate.
It was fitting that the Chancellor chose to invoke Shakespeare in his Budget speech. He has, after all, been a poor player these last five years. Yesterday he strutted and fretted his final hour upon this stage, and after May he will be heard no more. Yesterday was a Budget full of sound and fury, ultimately signifying nothing.
Julian Smith (Skipton and Ripon) (Con) rose—
Ed Balls: To give way or not to give way, that is the question.
Julian Smith: On the subject of sound and fury, will the shadow Chancellor clarify what he would do to stick to the commitments he made when he signed up to the charter for budget responsibility only a few weeks ago?
Ed Balls: People say that empty vessels make the loudest noise. I will set out clearly our approach to deficit reduction, but before I do let us go back to the ineffective right-hand man, who apparently is now standing in front of Downing street holding a yellow Budget box—less reality, more “Midsummer Night’s Dream”. What a shambles! Yesterday we had the Budget, today we had the farce of the alternative Budget from the Chief Secretary, the Liberal Democrats’ new economic spokesman, and now, with the Business Secretary shortly to come to the Dispatch Box, I presume we are to get the alternative alternative Budget from the man the Chief Secretary displaced from the job.
One has to feel sorry for the Business Secretary. He lost a job and still has to turn up to give the speech, sitting there beside one of his Treasury nemeses, with the other outside Downing street. Another Shakespeare quote comes to mind:
“Misery acquaints a man with strange bedfellows.”
How true. Let us not forget that the Business Secretary and the Chief Secretary served with the Chancellor in the Cabinet for five years. Together all three of them voted to put up VAT. The Liberal Democrats voted with the Tories to raise tuition fees to £9,000. They voted with the Tories for the hated and iniquitous bedroom tax. The fault is not in their stars, but in themselves, and the British people will not let them forget it.
Mr Brian Binley (Northampton South) (Con): Will this ploy of much ado about nothing delivered in a tempest form continue for the whole of the right hon. Gentleman’s soliloquy, or will he come to some points of import shortly?
Ed Balls: Some men are born great and some have greatness thrust upon them. I think we can say that of the hon. Gentleman, who has served his time in the House with great distinction. Let me take up his challenge.
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Mr Richard Bacon (South Norfolk) (Con):
“Drest in a little brief authority,
Most ignorant of what he’s most assur’d,
His glassy essence, like an angry ape,
Plays such fantastic tricks before high heaven
As make the angels weep”—
When is the right hon. Gentleman going to get on with it?
Ed Balls: I don’t know. That was all Greek to me.
Let us stop wasting time with the ridiculous Liberal Democrats and return to the Chancellor’s Budget. The Chancellor claimed, first, that working people are better off than they were in 2010. How out of touch can you get? No wonder Conservative Back Benchers were so muted in the House of Commons yesterday. They know, as we know, the reality of people’s lives. Unlike the Chancellor, they hear it on the doorstep. They know that with wage growth stagnant over the past few years, energy bills rising, and 1.8 million zero-hours contracts, when the Chancellor says there is a recovery, most people say, “Where is the recovery for me? It is not a recovery for me, our family and our community.”
The Chancellor tried to invent a new measure of living standards yesterday. It was a flawed measure because it includes income to universities and charities, but, compared with the first quarter of 2010, in the first quarter of 2015 the Chancellor’s measure has not gone up; it has gone down. Even on his own measure, people are worse off than they were in 2010. We know from the independent Institute for Fiscal Studies and the Resolution Foundation that on more sensible measures confirmed by the IFS two weeks ago, household incomes are down compared with 2010, and wages after inflation are down by more than £1,600 a year since 2010. This is the first Parliament since the early 1920s when the average person in work will be worse off at the end of the Parliament than they were at the beginning. In answer to the famous Reagan question, “Are you better off than you were five years ago?”, the answer is a resounding no.
We welcome the action to help savers and increase thresholds, but where was the action to help working people? Why did the Chancellor not announce an ambition to raise the national minimum wage to £8 an hour? Why did he not commit to expanding free child care for working parents to 25 hours? Why not cut business rates for small companies? Why not ban exploitative zero-hours contracts? Why not repeat the bank bonus tax and have a compulsory starter job for our young people? Why not scrap his absurd married couples allowance, which he barely mentioned yesterday, because it goes to only a third of married couples, and instead use the money to cut the taxes of working people? That is what he should have done. That is what a Labour Budget will deliver.
The Chancellor’s second claim is that he is rebalancing the economy. We all remember his claim of
“a Britain carried aloft by the march of the makers”—[Official Report, 22 March 2011; Vol. 525, c. 966.]
but the independent Office for Budget Responsibility said yesterday that growth is still lower than was forecast in 2010. Growth is set to be slower this year and next year than last year. The OBR confirmed that the Chancellor is on course to miss his 2010 target to double exports to
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£1 trillion—off course by more than £600 billion, and business investment has been revised down this year. The OBR says that “the growth of potential productivity per hour remains below its historical average throughout the forecast” and that “actual hourly productivity growth has again been weaker than expected”. The only thing it has revised up is its forecast for net migration.
Why did the Chancellor not act to deal with the housing crisis by committing to build 200,000 more homes a year by 2020? Why did he not establish a proper British investment bank for small and medium-sized businesses? Why did he not take up our idea, now the subject of consensus across our country, and establish an independent national infrastructure commission to stop long-term decisions being kicked into the long grass? Why did he not go further and devolve powers, including the uplift on business rates, to all areas in our country, rather than just to some? Why did he not commit to securing Britain’s place in a reformed European Union?
Sir Edward Leigh (Gainsborough) (Con): I would not want the right hon. Gentleman to forget to mention the deficit, so can we get back to that? It is quite important. When we came to power, following the Labour Government, the annual budget deficit was £141 billion a year. It is now £93 billion a year—still far too much. Will the right hon. Gentleman explain his plans for matching our plans to keep that budget deficit under control and preferably get rid of it by 2020?
Ed Balls: I understand the hon. Gentleman’s concerns. I know from reading Hansard that he said to the House a year ago 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 . . . That is somewhat worrying when we consider the very big challenge we face on deficit reduction”.—[Official Report, 20 March 2014; Vol. 577, c. 993.]
I share his concerns about the Chancellor’s track record, and I am going to set out our alternatives in a moment.
Before I do that, let us go back to the Chancellor’s claims yesterday. He seems to have been telling the media this morning that he has retreated from his commitment to austerity, but the OBR’s document sets out the truth. Its verdict on the Budget is that it represents
“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years.”
It goes on to give the details on page 130, where it sets out in graphical form the cuts in public spending that we shall see from the Chancellor. Paragraph 4.108 states:
“One implication of the Government’s spending policy assumptions is a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services and administration in 2016-17”.
I am going to set out a better way to do this, but first I will highlight what the Chancellor is actually doing. The reason he has to set out such deep cuts to public spending—deeper in the next Parliament than in this Parliament—is that, as the OBR confirms, and as the hon. Member for Gainsborough (Sir Edward Leigh) knows very well, in this Parliament he has failed to balance the books. Yesterday’s numbers confirm, according to the OBR, that the Government are borrowing £200 billion more than they planned in 2010. The deficit is set to be not balanced, but £75 billion. For all this Chancellor’s boasts about national debt falling, public
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net debt in 2015-16 is £217 billion higher than he was forecasting in 2010. He now claims that the national debt is going to be falling. That is based on his forecasts of short-term, one-off money coming in from the sale of bank shares. In 2014-15, he was planning on the national debt falling from 69.4% to 67.4%. In fact, his forecast yesterday has the national debt in 2015 at 80.4%, falling to 80.2%. It takes some hubris for a Chancellor to borrow over £200 billion more and then claim he has succeeded. That is the reality, and we know why. As the OBR confirmed yesterday, income tax and national insurance receipts have come in short of the 2010 forecasts by £97 billion cumulatively across the Parliament.
The result is the deeper spending cuts that the Chancellor had to set out yesterday. The IFS said back in the autumn that these were colossal cuts; they are still colossal cuts. The OBR said in the autumn that this would take spending on day-to-day public services back to the level of the 1930s. The Treasury tried to tell us yesterday that that was no longer the case. Its special advisers tweeted that they are only the deepest cuts since 1964. It comes to something when they have to boast that we are cutting our public spending to a level not seen for 50 years. In fact, the small print of the OBR tables reveals that 2018 spending, on the historical comparative measure that the OBR uses—day-to-day spending on public services—falls to its lowest level since not 1964 but 1938.
The Chancellor claimed that he had changed the position, but he has confirmed the reality—even deeper cuts in the next three years than in the past five years. That is the truth. These are, in my view, cuts that will be impossible for our police services, our defence and armed forces and our social care to bear. Even this Chancellor cannot make this scale of cuts to our armed forces, our police forces or our social care, so he is going to have to end up doing what he always has to do—raise VAT and cut the NHS. That is the reality.
The Chancellor wants us to believe that this does not have to happen. He says that he can instead cut welfare and tackle tax avoidance. The problem is that his record on both is miserable. He is promising £12 billion more cuts to welfare, but he cannot tell us where they are going to come from. We know he has brought in the bedroom tax, but he cannot tell us what else he has in store. In this Parliament, he has overspent on his welfare plans by £25 billion.
Apparently the Chancellor is now going to crack down on tax avoidance. This is the Chancellor who has seen the tax gap—uncollected tax—rise by £3 billion. This is the Chancellor who, with the Prime Minister, appointed Lord Green—who, it turns out, had presided over HSBC’s industrial-scale tax avoidance. Despite repeated questioning, the Chancellor still cannot tell us whether he actually talked to Lord Green about tax avoidance. Why will he not, between now and the general election, come clean and tell us whether he had conversations with Lord Green about tax avoidance? No wonder the Chancellor did not come to Treasury questions a couple of weeks ago. No wonder he does not want a head-to-head debate. We now know why. One member of the Tory Cabinet does not want to talk about Michael Green, and another member of the Tory Cabinet does not want to talk about Lord Green. One is a deluded fantasist who has great problems with the
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truth, and the other is the chairman of the Conservative party. To be fair, only the chairman of the Conservative party changed his name—although, then again, perhaps the Chancellor did too.
This is the truth: the Chancellor promised to make people better off, and they are worse off. He promised to balance the books in this Parliament; that pledge lies in tatters. He promised, “We’re all in this together”, and then cut taxes for millionaires. Now he is forced to confirm extreme and risky cuts to public spending in the next Parliament, bigger than in this Parliament.
We need a fairer, more balanced approach to the deficit and living standards. That is why Labour is now the only centre-ground party in British politics. We will cut the deficit every year and balance the books, with a surplus on the current budget and the national debt falling, as soon as possible in the next Parliament. Unlike the Conservatives, we have no unfunded commitments on welfare or on taxes. We were the party that wanted the independent OBR to audit all our manifestos—blocked by this Chancellor.
Andrew Gwynne (Denton and Reddish) (Lab): I am glad that my right hon. Friend mentions the OBR. I do not know whether he has had a chance to look at the online version of the Liberal Democrats’ document “An alternative fiscal path beyond 2016-17”, table 2.A of which is entitled, “Scenario input assumptions”. Can he guess who the source is? It is not the OBR, it is not the IFS: it is the Chief Secretary to the Treasury.
Ed Balls: We know from the autumn statement that the OBR confirmed that the scale of these spending cuts was agreed by the Prime Minister, the Chancellor, the Deputy Prime Minister and the Chief Secretary, and the same thing is clear about this Budget document. The OBR says:
“This profile is driven by a medium-term fiscal assumption that the Treasury has confirmed ‘represents the Government’s agreed position for Budget 2015’ and that was ‘discussed by the Quad and agreed by both parties in the Coalition.’”
The Liberal Democrats now come along and say that they were not really in favour of the bedroom tax, and not really in favour of these fiscal plans, but we know the truth. That is why we need a fairer and more balanced approach.
We will have sensible spending cuts in non-protected areas. We will cut winter fuel payments for the richest 5% of pensioners. We will cap child benefit at 1% for two years. The shadow Chief Secretary has been setting out in our zero-based review of every pound spent by Government cuts from rooting out waste and inefficiency in policing, in local government, in defence, and in schools. We are going to get rid of the police and crime commissioner elections. We are going to get rid of the free schools. We are going to stop the overpayment of housing benefit. We are going to deal with the issue of—[Interruption.] I meant new free schools. The shadow Chief Secretary has set out ways in which we can make those sensible cuts in non-protected areas.
We will also make fairer choices. We will reverse—[Interruption.] If the Chancellor wants to intervene, I will happily give way.
The Chancellor of the Exchequer (Mr George Osborne): No, carry on.
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Ed Balls: I am sorry, but I thought the Chancellor was about to stand up and tell us whether he talked to Lord Green about tax avoidance. He knows very well that our policy is to not have any more new free schools, and our £230 million saving is based on that.
We will make fairer choices, reversing this Government’s £3 billion a year tax cut—[Interruption.] Does the Chancellor want to intervene? The fact is that he cannot give us a yes or no answer about whether he talked to Lord Green about tax avoidance.
We will reverse this Government’s £3 billion a year top-rate tax cut for the 1% earning more than £150,000. We will introduce a mansion tax on properties worth more than £2 million, to help save and transform our national health service.
Our plan will deliver the rise in living standards and stronger growth needed to balance the books. It is a better plan for more good jobs and more balanced growth, because we know that if we can get our economy not to slow down, but to keep growing 0.5% a year faster than forecast, Government borrowing would be more than £32 billion lower in the next Parliament.
After this Budget, it is clear that Britain needs a better plan, not a Budget flop from a Chancellor whose failing plan is not working for working people. The choice is now clear: a tough but balanced and fair plan to deliver rising living standards, save the NHS and get the deficit down with Labour, or an extreme and risky plan under the Tories for bigger spending cuts in the next four years than the past five, which would cause huge damage to our public services and put our NHS at risk.
If they ever write a play about this Chancellor, it will be a tragedy of hubris, fantasy and thwarted ambition: the ruthless prince whose desire to be king has blinded him to reality and made him reach too far. Nothing will better reflect his time in office than the leaving of it: a final Budget built on sand and smoke—a Budget signifying nothing. He has run out of lines, and it is time he left the stage.
12.52 pm
The Secretary of State for Business, Innovation and Skills (Vince Cable): It is a privilege to respond to the Budget. I have calculated that, if we include emergency Budgets, this is the 20th successive Budget to which I have responded. I have begun to recognise some common traits, one of which is that the shadow Chancellor, whoever it is, has to adopt a tone of outrage. The current shadow Chancellor does outrage very well—I will concede that—but what he does not do so well is memory. He has the same problem as his party leader of forgetting important things.
The shadow Chancellor seems, for example, to have had problems remembering his own version of the millionaires’ tax cut, when throughout almost all the period of Labour Government the top rate of tax for millionaires was 40% rather than the 45% it is today. I think he has forgotten his authorship of that famous phrase, “No more boom and bust,” and his own role in boosting the banking sector such that it became overweight, toppled over and caused much of the damage and hurt we are still living with today. I think he has forgotten his
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record as a forecaster: we all remember his triple-dip recession—there was no triple and there was not even a recession.
There is help at hand, however, because one of the genuinely good legacies of the previous Labour Government is the Crick Institute, which will open shortly and will do medical research. I understand it will be taking forward some of the excellent work of University college London on neural pathways. That will open the door to a cure for amnesia, which seems to be the shadow Chancellor’s main problem.
Kelvin Hopkins (Luton North) (Lab): Does the Secretary of State not accept that the real change took place when Mrs Thatcher and Geoffrey Howe abolished exchange controls, raised interest rates, raised the value of the pound, destroyed manufacturing and shifted power to the City?
Vince Cable: From what I remember of the facts, the biggest decline in manufacturing took place when the hon. Gentleman and his colleagues were in government. I will come back to that later.
Chris Bryant (Rhondda) (Lab): I am genuinely flabbergasted that the Secretary of State is accusing others of suffering from amnesia. He seems to have forgotten all the speeches I remember him making from the Opposition Benches in support of our spending plans. In fact, the Chancellor, who is sitting beside him, made exactly the same sorts of speeches in support of our spending plans all the way up to the eve of the recession. If some of us are a little sceptical it is because the Secretary of State is forgetting his own amnesia.
Vince Cable: We will come in a moment to my own and my party’s distinctive approach to spending and taxation, which offers a very sensible middle way between the two extremes on offer.
Let me deal with the shadow Chancellor’s various critiques of Government policy, including whether we have made the numbers add up, inequality and living standards, and the balanced recovery. I will start with his accusation that we have failed to balance the books. The shadow Chancellor is a very clever man, but there is a great deal of intellectual confusion about what Labour is accusing us of. The Government started with the objective of trying to deal with the structural deficit—in jargon, the cyclically adjusted current deficit—within four to five years. We are now spanning that over seven years.
What is the problem? If the Government had pressed ahead dogmatically with the timetable, we would have been accused of being inflexible and causing undue economic harm, and there would have been righteous indignation from Labour. In the event, however, the Chancellor was flexible and responded to changing circumstances, not least the effect on the UK economy of rising world commodity prices and the slowdown in Europe.
The Chancellor is a learned man. He is familiar with Keynes’s “General Theory”—I am sure he had read it several times from cover to cover—and he understands that, in periods of economic slowdown, counter-cyclical stabilisers should be used, which is what we did, alongside the use of monetary policy, to stabilise the economy.
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It is greatly to his credit that he did that, and that accounts for the fact that we are taking longer than was planned to deal with the deficit. None the less, having done that, the deficit is clearly now being reduced. We have got to the single point that debt as a share of the economy is starting to decline. There is a strong recovery—the strongest in the G7—and we have extraordinary employment figures, with the largest number of people in employment in history.
On the shadow Chancellor’s reference to the balanced recovery, I want to focus on one important development, namely what is happening with business investment, which is what drives sustainable recovery. Let me cite for the shadow Chancellor an interesting contrast. Between 2000 and 2007, 3% of the contribution to British growth came from business investment. That was a period when the British economy was being driven by consumption, household borrowing and a boom in house prices. There was very little business investment. Since the crisis—since this Government have been in office—30% of growth has been driven by business investment.
It is possible to break that figure down even further as to where that investment came from. In the period of Labour Government running up to the financial crisis, the contribution made to investment by property—overwhelmingly commercial property speculation—was 80%, and 4% of that investment was in the form of plant and equipment, which is why we had rapid de-industrialisation of the kind referred to by the hon. Member for Luton North (Kelvin Hopkins). Under this Government, the share of property investment has fallen to 30%, and 50% of all business investment is now plant and equipment—real factories making things and a revival of manufacturing industry.
Steve McCabe (Birmingham, Selly Oak) (Lab): Is it not the truth that the deficit today is where it would have been under the plans of my right hon. Friend the Member for Edinburgh South West (Mr Darling), and that until this moment not a single Government Member has admitted that the Chancellor was talking nonsense in 2010 when he claimed that he would wipe it out by the end of this Parliament?
Vince Cable: The Chancellor was not talking nonsense. It was perfectly sensible to aim to remove the structural deficit as quickly as possible. The fact that we have taken longer over it is a reflection of common sense.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): The Business Secretary will know that manufacturing has hardly shifted as a percentage of GDP in a period when Tata Steel is potentially selling off half its UK operations to a gentleman with a spurious background in that industry. Is he really saying that the march of the makers and manufacturing is doing so well when 20,000 to 30,000 jobs might be at risk because of de-investment in British and European markets, particularly in the steel industry?
Vince Cable:
We do not know what will happen in relation to Tata Steel, but I and my Department are talking to the parties involved, including the trade unions, and we are very concerned about the situation. The hon. Gentleman may, however, have overlooked one thing in the Budget. We had a very emotional
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debate in the House about the future of the steel industry a couple of months ago, and there is a lot of genuine concern, which I share, about the future of steel. Many of its problems derive from relatively high energy costs, but one element of the Budget was to bring forward the compensation to help steel producers—whether in south Wales, the midlands or the north—to deal with the pressures on their costs. I would have hoped that, at the very least, there would be a little acknowledgment of that.
Tom Blenkinsop: Yes, the Chancellor announced that, but he had said that the compensation scheme would come in much earlier than next year. The Tata long products division is still operating under the existing conditions and, may I add, with a carbon floor price brought in unilaterally by this Government—without any discussion with the industry—which is jeopardising all those jobs. Will the Secretary of State at least talk to the Chancellor about speeding up the compensation package, which is much needed for energy-intensive industries?
Vince Cable: The industry has already received a certain amount of compensation. The constraint on bringing it forward is not the reluctance of the Chancellor, but the problem of getting state aid approval. Once that approval has been given, the compensation can and will be brought forward.
Adam Afriyie (Windsor) (Con): Does the right hon. Gentleman share my bemusement at the fact that Labour Members are complaining about our rate of economic growth and the low levels of unemployment? This country is respected around the entire world for its position on all such matters, which affect the livelihoods of our constituents across the country. I am surprised that Labour Members will not acknowledge even one point when it comes to this Government’s great, solid, sensible economic management.
Vince Cable: The hon. Gentleman is right. I do not think that the shadow Chancellor mentioned the word “employment”, which is interesting because when we first entered office we heard nothing other than the threat of mass unemployment.
Let me pursue the argument about how we will deal with the deficit in the future. It is perfectly right to say that the parties could debate our actual priorities. To be fair to my Conservative colleagues, they are quite explicit about how they wish to deal with the deficit by relying on reductions in public spending. They recognise, as we do, that there is still a significant problem left. This morning, my right hon. Friend the Chief Secretary set out a different way of achieving the same objective. We all have a responsibility to deal with the problem, and we suggest going about it through a different mixture of taxation and spending. The Conservative approach is to deal with it through spending cuts, and given where they come from politically, that is perfectly understandable. Our approach is different: it is a mixed approach, with a ratio of 55% spending increases to 45% tax increases.
With that different balance, we could do more for the NHS. We have talked to Simon Stevens about the finances required to sustain services, including the extra £8 billion and the commitment on mental health. As far
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as my Department and its work in supporting growth is concerned, I can say—I do not know what my shadow can say, because he is not in the Chamber—that, on such a trajectory, we could sustain spending on the Budget headings that support growth. Those headings cover the industrial strategy and business support; financial interventions, such as the business bank, the green investment bank and the regional growth fund; innovation, which we need to double by the end of this decade if we are to be competitive internationally; science and research, which we plan to grow in real terms, and which the Chancellor has shown a particular interest in and whose budget he supports; adult skills, further education colleges and apprenticeships; and higher education teaching, research and student support. Those are my priorities, and I am very interested to hear what the Opposition’s are. I think their priority is tuition fees, and I will make a little analysis of how that will be done in a moment.
Sir William Cash (Stone) (Con): My right hon. Friend made a very important speech relating to banks, particularly in rural areas. Will he be kind enough to give us a few extra thoughts on that question? For example, the last bank in Eccleshall in my constituency has been closed. Does he not regard that as a very retrograde step? It is very important to maintain facilities for banking in rural areas.
Vince Cable: The hon. Gentleman is absolutely right to say that that is a very retrograde step. The Economic Secretary and I have had discussions with the banks about how to deal with that problem, and about how to mobilise the post office network—under this Government, it has been saved and stabilised—to provide an alternative. I am not absolutely certain, but I hope that an announcement will be made within the next few days to protect the position of the last bank in the village.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): There was a £30 billion unanswered question in yesterday’s Budget. We know that there will be £12 billion of cuts in welfare, but will the Secretary of State outline to the House where the axe will fall for the remainder?
Vince Cable: If the hon. Lady read the document that the Chief Secretary introduced this morning, she would get a very clear picture. I have explained the 55% to 45% split, which is quite explicit, and I am very happy to defend it.
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I am very pleased by the announcement in the Budget of additional support for British businesses exporting to China, but will my right hon. Friend continue to press the case for ever-greater investment in UK Trade & Investment, and for its reform, so that we can start to help small and medium-sized enterprises to export to important emerging countries, such as Brazil, Argentina and India?
Vince Cable:
The hon. Gentleman is absolutely right. Indeed, UKTI’s work these days concentrates on supporting SMEs. As a country, we underperform on the contribution of the SME sector to exports, compared with countries such as Germany, and that is the focus of UKTI’s work. I would also emphasise his other point on the need to
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build up our relationship with China. We have worked very hard on that, and the Prime Minister and the Chancellor have led from the front on our relations with China, which are good. The establishment of the new financial institution, in which Britain is a co-investor, is a signal of the importance we attach to our relations with China, and that will continue.
Sir Edward Leigh: My right hon. Friend is making a very thoughtful speech, in marked contrast to that of the shadow Chancellor, who was more Henry VI than Henry V. Will he comment on the staggering paucity of the cuts the shadow Chancellor will make? They appear to have been dreamed up on the back of a plain-packaged fag packet. How will the shadow Chancellor get rid of the deficit just by abolishing police and crime commissioners and by not opening a few more free schools? I still do not understand how he is going to solve the problem of the deficit.
Vince Cable: The hon. Gentleman is absolutely right. I thought it might be useful to take one element of the Opposition’s policies to see how utterly incoherent it is. I want to home in on the particular issue of how they would fund a reduction in tuition fees. To be frank, this is a tricky subject for all parties. All parties, including the Labour party, have gone back on their commitments. My party has done so, and I know that the Conservatives had some embarrassment in 2005. I would have thought that common sense suggested we ought to draw a line under this episode. I know from the feedback I get from the shadow Cabinet that the shadow Chancellor has been a voice of sanity in this debate, but his leader has not listened to him. Clearly, I am parti pris on this matter, but let me read a comment made yesterday by a man who describes himself as having been
“responsible for delivery in Downing Street under Tony Blair”.
I am not sure that I would want that on my CV, but he is very happy about it. Referring specifically to this proposal, he said:
“The result would be to spend almost £3bn to subsidise high earners of the future. The present system is attracting more students than ever, especially from low-income families. In 2004, before fees were introduced”—
“14 per cent of the lowest socio-economic fifth…went to university; last year 21 per cent did. Labour’s proposal therefore offers not ‘more for less’ but ‘less for more’.”
The position is actually worse than that, because we do not understand how it will all be paid for. A £2.6 billion gap needs to be filled to pay for the cap. The original idea was that there would be some kind of granny tax, with grannies paying extra into their pensions. That comes down to the proposal about the pension pot. The proposals that the Chancellor made yesterday diminished considerably the resource available from that source, so where will the money come from? Even if the Labour party can identify where the money will come from, how can it guarantee to universities that the money will get from the grannies to the Treasury to the universities? How exactly will that be sustained in the years ahead?
This is not just a debating point; these issues really matter. The feedback that we are getting from universities is that they have stopped investing because there is a political risk—although it may not be high—of a Labour
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Government. Universities have stopped investing and are having to fall back on their reserves. Some universities, such as Cambridge, have said that if this policy were to happen, they would drastically reduce the number of students they admitted and cut back on their supervision. The quality of education would suffer.
It requires a particular kind of genius to dream up a proposal of such transcendental stupidity. I was going to ask the person responsible to stand up and tell us what it is all about, but the shadow universities Minister is not here. He is the same guy who left the note saying that there was no money left. What he is now proposing is that universities should experience precisely the same treatment.
Ed Balls: The Business Secretary fought the last election on a promise to stop the Tory VAT bombshell and a promise to abolish tuition fees. Which does he think was the bigger mistake of the two?
Vince Cable: We did not promise to abolish the VAT bombshell. We did make the promise on tuition fees and that was a mistake. We have regretted it and apologised for it.
I just wish that the Labour party would have the same wisdom, because if it ever gets into office, it will go down this road and it will do severe damage to the budget and to universities. The worst thing about this policy is that the primary beneficiaries will be the investment bankers of the future. The shadow Chancellor has been going around complaining about millionaires’ tax cuts. What he is now advocating is a millionaires’ debt-relief scheme.
Mr George Howarth (Knowsley) (Lab): To use the right hon. Gentleman’s own words, would he describe the promise to abolish tuition fees at the last election as transcendentally stupid?
Vince Cable: The promise was not to abolish tuition fees, but to not increase them. We did increase them and that was a matter of regret.
Mr Mike Weir (Angus) (SNP): I speak as a representative of the one party in this House that has not gone back on its promise on tuition fees. There are no tuition fees in Scotland. The Secretary of State talks about the costs of the policy, but was not one of the difficulties in the recession the huge amount of personal borrowing? Students are now leaving university owing a fortune because of tuition fees and the other costs of their studies. How will that work through the economy in the future?
Vince Cable: I was hoping that we would have an intervention from the Scottish nationalists, because they illustrate better than anybody else the stupidity of this policy. There have not been tuition fees in Scotland and the quality of university education is declining because there is less resource. The worst thing of all in Scotland is that in order to maintain this policy, they have raided the budgets of further education colleges, taking money from working-class children in Scotland to finance middle-class undergraduates. That is a very retrograde policy. If anybody wants to see where Labour’s policy will lead, they should indeed go to Scotland.
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Let me turn to the bigger question of inequality, because many of the accusations that are made by the Opposition relate to the question of whether we have become a more unequal society. It is certainly true that if we talk about the top 1%, there is extreme wealth. Some of it—that created by entrepreneurs and risk takers—is totally understandable in a free-enterprise society, but much of it is not. That problem is shared across the world. It is true of the top 1% in social democratic Scandinavia and in communist China. These people can move, and they can move in and out of our country. It is to the credit of the Chancellor that he was able to say yesterday that the share of income tax that is paid by the top 1% has risen under this Government from 25% to 27%.
Of course, there is one way in which the ultra-rich in society can be made to pay that they cannot run away from, and that is by targeting high-value property. That is one area where my party has common ground with the Labour party.
If we take the wider issue of income distribution and the effects of austerity, the evidence is clear. People in the top 10% or 20% have contributed more than average in cash or percentage terms to the austerity programme and deficit reduction. For an objective measure of inequality, we should look to bodies such as the Institute for Fiscal Studies, which is totally independent and has been a thorn in the side of successive Governments. It has done an analysis of income inequality before and after this Government, looking at the basic Gini coefficient, and found that inequality in income is lower today than in 2007-08. If one digs into the figures a little further, one finds that the numbers depend on which consumer index is applied. However, even if one applies different consumer indices, the IFS analysis shows that, at the very worst, income inequality is no worse under this Government than it was under the Labour Government. I hope that when we hear the righteous indignation in future, the basic facts about this matter will be properly understood.
Ed Balls: Will the Business Secretary confirm that because of measures such as the bedroom tax and what has happened to tax credits—things that have happened only because of Liberal Democrat votes—the quintile that has made the second biggest contribution is the poorest 20% of families in our country? Does he feel proud of that?
Vince Cable: It depends entirely on how we look at the combination of tax and tax credit. The simple point is that the top quintile—the top 20%—has paid four times as much in deficit reduction as the group to which the right hon. Gentleman referred.
Alex Cunningham (Stockton North) (Lab): Of course, the poorest in our society are the people who are on benefits. The Chief Secretary to the Treasury has ruled out support for the £12 billion of cuts to the welfare budget, which would make income inequality even greater for the poorest people in our society. If the Secretary of State does not support those cuts, what cuts does he support to fill the gap?
Vince Cable:
Let me deal with one of the points of righteous indignation that is made about welfare cuts—the point about the so-called bedroom tax. The problem with it is that the idea of relating housing benefit to the
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size of accommodation did not start under this Government; it was a long-standing policy in relation to people in private rented accommodation. Where we have disagreed with our Conservative colleagues—we have made this explicit—is in saying that the so-called bedroom tax should not apply retrospectively. If people are given an offer of accommodation in the council house sector and they turn it down, they should pay it, but if they do not receive a satisfactory offer, they should not. That is a point of difference. The sheer righteous indignation bears absolutely no relation to the history of this problem.
Debbie Abrahams (Oldham East and Saddleworth) (Lab): Will the Secretary of State give way?
Vince Cable: I will take the hon. Lady’s intervention later.
Let me turn to the broader issue of living standards. It is blindingly obvious that in all the western countries that were hit by the financial crisis, there has been a fall in real wages. That has happened everywhere. Countries—including ours—were made poorer, production fell, productivity fell and, although we got more people back into work, real wages fell with it. I am putting this in terms of basic economics. Unless real wages had been kept “sticky”, as Keynes termed it, they were bound to fall, and they have fallen. The alternative was what has happened in France, Spain and Italy, where real wages were maintained, but where there has been mass unemployment as a result, particularly among younger workers. That has not happened here, which is a blessing.
The figure that the Chancellor produced yesterday is highly relevant, because what matters to households is not just wages but people’s take-home pay and disposable income. Disposable income involves not just wages but tax credits and taxation, and families are now better off then when we came to office. That is a result of several interventions, the most crucial of which was lifting the tax threshold. We made the radical, massive change of lifting the income tax threshold from £6,700 to £10,800, and that has brought a great deal of relief at a time of economic crisis to 27 million people. Three million people have been lifted out of tax altogether—mainly women on part-time earnings—and that has benefited workers by the equivalent of £800 a year. That has cushioned working people from the effects of the crisis, and there should be some acknowledgement of that from the Opposition Benches.
Debbie Abrahams: I must challenge the Business Secretary on what he has said about the impact of this Government, which includes the Liberal Democrats and their policies. The Institute for Fiscal Studies clearly states that as a result of tax and spending changes, low-income families, particularly those with children, are proportionately worse off, and incomes have reduced by £1,100. We cannot avoid those facts.
Vince Cable:
As I said, the whole of society was hit by the economic crisis, but it is clear that the poorest in society have not been proportionately badly hit, and the people at the top have paid proportionately more. I
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remind the hon. Lady of what the IFS data said, which was that if we take into account inequality in all its aspects—that includes tax, tax credits and earnings—in income terms Britain is more equal, or as equal now as it was under a Labour Government. Labour Members may need to explain why the economy got into that position when they were in office, but that is what the independent sources tell us.
In addition to the tax allowance, the other key step has been protection of the minimum wage and the Low Pay Commission. I was alarmed by comments made yesterday by the Leader of the Opposition about the minimum wage. I am not one of the people who wants to trash everything that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) did when in office. There were some mistakes but also some good things, not least making the setting of interest rates independent through the central Bank—a very positive step. Supporting science was another positive step, as was the establishment of the Low Pay Commission as a mechanism for deciding what is in the national interest as far as the minimum wage is concerned, and how we balance the perfectly natural wish of working people to see their wages rise with the overall interests of the economy and employment.
What was alarming about the comments of the Leader of the Opposition yesterday was that he now wishes to turn that valuable inheritance into a political football. I think he originally said that he would determine politically that there should be an £8 minimum wage, regardless of the conditions of the economy. Yesterday it was “at least £8”, but why not £8.50, £9 or £10? We could all bid in a Dutch auction on the minimum wage, but it would be ruinous for the economy.
Ed Balls: So when a year ago the Chancellor of the Exchequer announced his goal of a £7 minimum wage, did the Business Secretary think that was equally an error?
Vince Cable: The Chancellor did not announce that as a goal; he made a projection about what, under certain assumptions, the minimum wage would be. He has agreed with me and we have a combined view that we should accept the advice of the Low Pay Commission, which is what we have done. We have maintained a valuable institution, and I am seriously worried about the irresponsibility that has crept in as a result of that simple populist gesture by the Leader of the Opposition. That is not just damaging to the economy in the future, but it undermines a valuable institution that his predecessor brought in.
Tom Blenkinsop: At least the Secretary of State is being consistent on this issue. Will he confirm that in 2012 the Government froze the national minimum wage for those under 21?
Vince Cable:
We have always made a clear distinction between the basic recommendation on the minimum wage, which every Minister in my position has accepted, and some of the second-order questions. We have changed the recommendation on apprenticeships, and indeed others, but the recommendation on the basic minimum wage is fundamental and something that Ministers of both Governments have honoured. The Leader of the
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Opposition—for reasons that are unclear beyond anything other than political populism—now proposes to destroy that tradition, and that is very retrograde.
Mr Kenneth Clarke (Rushcliffe) (Con): I share the right hon. Gentleman’s experience of having opposed the minimum wage when it was proposed by the previous Government, although I now realise that was a mistake and have been converted to the value of it, given how it has worked. Does he agree that if the political debate follows what the shadow Chancellor wants, and each of the parties—all seven of them, no doubt—says what it would tell employers to pay as a minimum wage, we go back to the danger that I initially feared of unemployment being caused by bidding up, for vote-catching reasons, the basic pay of people trying to get into work?
Madam Deputy Speaker (Dame Dawn Primarolo): Order. Before the Secretary of State replies, may I gently say that 23 Members wish to take part in this debate, and he has been speaking for nearly 35 minutes. I understand that he has generously taken lots of interventions, but will he perhaps think about all his colleagues who still wish to speak?
Vince Cable: I will certainly respond as you wish, Madam Deputy Speaker. I think I have taken at least 23 interventions, but I am happy to cruise to a conclusion on that note.
If we are going to lift real wages and living standards, that must be done through the growth of productivity. That is the only way it can happen. A whole set of measures in the Budget suggest how that can happen in the long term. It must come through skills and innovation, and there was a series of constructive initiatives—catapults, science capital investment, driverless cars, the internet of things, the energy research institution, and other things—in the Budget. Cumulatively, those will drive up productivity in British industry.
One announcement that perhaps did not receive as much attention as it should have done was about trying to improve the way funding flows through apprenticeships and a voucher system that enables employers—particularly small companies—to acquire the skills they need. The key, however, will be business investment, and I have already pointed to improving trends in that respect. One lesson of our period in office is that under the difficult conditions we have had, by investing judiciously through bodies such as the regional growth fund, the Green Investment Bank, and the British Business Bank, the Government can stimulate significant amounts of additional private investment.
I will finish with an announcement in response to a question that the Leader of the Opposition threw out yesterday about the Green Investment Bank. We have agreed that that is a successful initiative that stimulates private investment, and for £2 billion from Government there has been £3 billion extra from the private sector. We want to build on that success and are looking at a range of options for bringing private capital into the Green Investment Bank, and to give it greater operational freedom and enable it to borrow in capital markets. That will provide it with an alternative channel of funding, and ensure its future as a lasting and enduring institution.
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There was a great deal of excitement earlier this morning about the alternative route to fiscal policy that my party was advocating, and it is right that in the run-up to the general election we should have a different approach to how we balance the budget. However, there was a lot of common ground, and this was a joint coalition Budget that we are proud to have been associated with. It was about economic growth—we are now the most successful in the industrial world having been in the worst crisis—and about rising business investment, exceptional levels of employment, and rapidly falling unemployment. All that is taking place at a time when the public finances have been approved, and we have moved from being a basket case to a successful economy.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I have to apply an eight-minute time limit to ensure that everybody gets eight minutes.
1.29 pm
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): I shall confine my remarks to the Chancellor’s speech yesterday. According to him, Britain is now walking tall and basking in the glow of economic recovery. From my constituency perspective, those words will ring hollow to many. It is difficult to feel pride or walk tall when going to a food bank, which is the reality for an increasing number of people desperate for alleviation of the policies that the Government have implemented over the past five years. Talk of walking tall and the sun shining rings hollow in their ears.
This is not just about those at the sharpest end of the Government’s policies, however; it also applies to the average family. Indeed, we have already debated income levels for average families over the past five years, and the overwhelming consensus of opinion and analysis is that there has been a considerable reduction in average incomes over those years. That is certainly the day-to-day experience of most MPs, either in their surgeries or knocking on doors. We cannot blame the public for being so cynical. If they hear the litany of Government achievements, they cannot help comparing it with their day-to-day lives.
Then there is the fear. The Government tell us that in spite of all this success more cuts need to follow and that those cuts will be sharper over the next few years than in the last. We cannot blame people for wondering, if we are doing so well and have suffered so much, why we have to have another round of cuts. It is because the so-called long-term economic plan is in reality just an extension of the Government’s failed short-term economic plan. They failed to reach their target on deficit reduction because, in spite of the headline economic fears, they have driven us in the direction of a low-income, low-productivity economy, resulting in a reduction of the tax receipts necessary to reduce the deficit.
Presented with the conundrum of how to get economic growth with lower tax receipts, all the Government have to offer is more of the same. They have outlined another £30 billion-worth of cuts to come, with £13 billion coming from departmental spending—I shall address the implications of that in a minute—and £12 billion from welfare. Can we blame the public for being
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cynical, given that the Government have been promising welfare cuts for the last couple of years but welfare spending has in fact increased?
The Government also say they will protect pensions. What does that mean for the balance of welfare provision for other people? It implies huge cuts. We cannot blame the public for being concerned. The Government say that £5 billion will come from blocking tax avoidance and evasion. Given their rather dubious record on securing money from that source so far, we cannot blame the public for being cynical.
There has been an improvement in manufacturing—part of the Government’s so-called rebalancing exercise—but it has been very modest. Indeed, in January, it actually declined. We were told that we had a £1 trillion export target for 2020, but we are less than halfway there. Research and development, which is key to keeping Britain’s advanced technology advantage over other countries, has been falling behind other developed and developing countries, and according to the OBR projection it is going to fall further. Bank lending to business—essential to get the investment needed to expand our economy—has lagged throughout.
One element that bothers me in particular about the headline £13 billion cut to departmental spending is this: if some Departments are protected, others will not be and will have to take a disproportionate spending cut, and one of those will be the Department for Business, Innovation and Skills. Notwithstanding our occasional differences, I recognise that the Secretary of State has been a doughty champion of business interests in this country, and to have a disproportionate amount of those cuts focused on his Department could have the most profound long-term implications for the so-called long-term economic plan. I fear for the future of BIS and the policies it promotes, which are vital to getting the sort of economic growth we need.
I want to conclude with a couple of remarks about a potential gaping hole in the figures. We have already debated student loans, tuition fees and so on, but I find it astonishing that the Secretary of State did not refer to the resource accounting and budgeting charge—the cost of the non-repayment of student loans and its future implications for the budget. It is now reaching about 50% and is estimated to be about £30 billion by 2030. The implications are enormous. Labour’s policies would address at least part of the problem. The Government can accuse Labour of being irresponsible, but they have failed to demonstrate how it is responsible to introduce a system that will leave a legacy financial black hole on the scale they are talking about.
According to the OBR, the Government are going to sell the student loan book after all—I praise the Secretary of State for blocking it. When we heard evidence on that point, experts told us that if they wished to sell it, they would have to offer sweeteners or sell it at a hugely discounted rate. I would like to know whether the Chancellor has factored in the cost of selling the student loan book and whether the sum involved will meet the Government’s financial projections.
1.37 pm
Mark Simmonds (Boston and Skegness) (Con):
It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey), but he will not be surprised to hear
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that I did not agree with his analysis at all. I gently ask him to reflect on how he will explain to his constituents during the election campaign his party’s plans to reduce the deficit, because we got none of that detail during the shadow Chancellor’s contribution.
It is a pleasure to support the Budget, against the backdrop of the fastest-growing economy in the G7, a record number of jobs having been created, with employment at a record high, the deficit down, the national debt starting to fall as a share of the economy, GDP up 7.8% since 2010 and more than 750,000 new businesses having been created. That is in stark contrast to the contribution from the shadow Chancellor, whose extraordinary strategy is both shallow and hollow, as articulated earlier. There is seemingly no policy framework and no detail, which is why he and the shadow Treasury team are focused purely on trying to scare the electorate into believing there are going to be VAT increases and NHS cuts, neither of which is true.
In 2010, I made a contribution in the House urging the Chancellor and the Government to do four things. The first was to control public expenditure to improve the UK’s credit rating and to reduce yields on Government bonds and gilts to allow more of taxpayers’ money to be spent in the UK, rather than being sent abroad. The second was to encourage the Chancellor to dismiss the scaremongering that fiscal consolidation and public expenditure control lead to economic slowdown: they do not. Instead, we will have an expansionary fiscal consolidation. The third was that once expansionary fiscal consolidation delivers greater consumer confidence, the tax burden should be revised down. Fourthly, as expansionary fiscal consolidation delivers, businesses should be encouraged to invest as confidence returns. All those facets have been delivered by this coalition Government, to the benefit of all our constituents throughout the United Kingdom.
These strategic macro-economic achievements have led to real, lasting, positive impacts on people’s lives in my Boston and Skegness constituency. There has been a 23% drop in jobseeker’s allowance claimants since 2010, while 3,500 new apprenticeships have started in my constituency over the same period. Approximately, 5,400 people have been taken out of paying tax altogether, and thousands have had their income tax bills reduced by the raising of the income tax thresholds. In addition, freezing fuel duty has been an important lifeline for many of my rural communities.
The driving force behind the economic recovery is inevitably the private sector—businesses. That is why I warmly welcome some of the announcements in the Budget: supporting the digital infrastructure strategy; supporting farmers by extending the averaging period, which is a huge and important change for farming communities such as mine in Lincolnshire; simplifying the tax system, including the abolition of class 2 national insurance for the self-employed—a huge simplification that will benefit up to 5 million people; the much needed review of the anachronistic workings of the business rate system. Those all provide further evidence that Government Members are on the side of business and Labour Members are hostile to business.
I have three specific requests for the Treasury team. The first is to continue to assess and make sure that there is fairness in the public sector funding formulas. Rural areas such as Lincolnshire still do not get their
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fair share of resources, particularly in education and police funding. Neither do they reflect the speed of population change in some parts of the country.
Secondly, in his immigration speech in Derby, the Prime Minister announced a fund to alleviate some of the pressures on towns such as Boston that have seen significant inward economic migration. Will the Exchequer Secretary say a little more in her response about when the details of this fund will be announced, the scale of support that will be available and the criteria that will have to be met for the distribution of the funds?
My third request is for an assurance from the Treasury of its continued commitment to flood defences. I was pleased to see that 47 new projects are being added to the six-year programme and pleased about the acceleration of some programmes, such as Lade Bank pumping station and the North Forty Foot drain, in my constituency. This is vital for the protection not just of people and property, but of valuable agricultural land on which we all rely as we purchase food in our United Kingdom supermarkets. I was pleased, as I am sure you were, Mr Deputy Speaker, to see on page 84 of the Red Book that business contributions to flood defence projects are now tax-deductible expenditure—a huge and welcome addition to the armoury for financing flood defences.
In conclusion, it is clear to me that significant progress has been made by this Government in rebuilding the shattered economy we inherited from the Labour party. Debt is down; borrowing is revised down; growth is revised up; employment is up. The Chancellor and his team are effervescing with innovation: personal saving allowances and Help to Buy ISAs have been strongly welcomed by hard-pressed savers and young aspiring home owners. This Budget evidences and demonstrates not only that the long-term economic plan is working, but that the short-term plan is working, too.
1.44 pm
Derek Twigg (Halton) (Lab): I congratulate the right hon. Member for Boston and Skegness (Mark Simmonds) on making a strong speech, but I have quite a few differences with it, as I shall explain. What we had yesterday was a Budget that does not meet the challenges of the future, as we are living in an increasingly uncertain world and this Budget does not provide a proper plan to deal with that.
The Business Secretary talked about memory. While we have already heard today that the Liberal Democrats backed the bedroom tax and supported an increase in tuition fees, we should remember, too, that they supported getting rid of the education maintenance allowance and agreed to scrap the Building Schools for the Future project, which affected many schools in my constituency. The Liberal Democrats’ greatest crime, however, is giving cover to the Tory Government to allow them to implement austerity, which has impacted disproportionately and negatively on constituencies such as mine. This gives the lie to the view that the recession and the financial crisis were Labour’s fault. We all know it was down to the banks, and we all know that when Labour left office in 2010 growth was up and unemployment was down. That is the reality.
This Government failed to keep their promises, failed to meet their target on reducing the deficit and failed on borrowing. Their austerity measures in the early part of this Parliament strangled the recovery that had started
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under the last Labour Government. I could go on about a number of measures, but we should never forget VAT policy, because a Tory Government always raise VAT.
Whatever gloss the Chancellor tried yesterday to put on his economic record and the prospects for the future, the fact remains that the recovery is fragile. The International Monetary Fund says that our real gross domestic product per head is below that of the US and well below that of Germany and France. The productivity problem has not been addressed by this Chancellor or this Government, and we have seen no sign yet that the large cash reserves held by businesses are being released for investment. That is another interesting sign. Many of the jobs created are, of course, insecure, temporary or fixed-hours-contract jobs. Insecurity presents a real problem; many of my constituents are finding that insecurity stops them planning for their future—whether it be in buying a house, picking a holiday or deciding on some of the most basic things in life.
This Government could have done much more on investment in infrastructure and capital projects, and I am sorry that the Chancellor did not say more about them yesterday, rather than making promises of jam tomorrow. Many road and rail projects that the Government have previously announced and trumpeted were planned or started under Labour. We need to do more on investing in our infrastructure. Given the cheap rates of borrowing available to the Government, they should have done more with investment, allowing them to provide many more quality jobs.
Lots of schemes could have been taken forward in every constituency. Let me mention the campaign to restore a lock and open up the Bridgewater canal to the Manchester Ship canal in Runcorn. This was a brilliant scheme put forward by the Runcorn locks restoration society, and it would also help Runcorn town centre. This is a typical example of where money could be found, and I hope that the next Government will do so.
Businesses, and especially small businesses, are still having problems borrowing money, which clearly is stunting further growth. The inability to get banks to lend to small businesses is one of the biggest failures of this Government. I am pleased that a Labour Government will do more to help small businesses. In particular, we will cut business rates for 1.5 million small businesses and then freeze them the following year. A Labour Government will do more.
Of course we have to attract businesses to constituencies such as mine. We do attract them. Halton council has done very well in that respect, but we need more help. Unemployment remains stubbornly high, particularly among the young, and there is a real problem with those not in employment, education or training with an above-average number of our young people in that category. The minimum wage will be important for providing better security, as well as helping people with their pay.
A couple of areas have not been dwelt on sufficiently in the debate so far. If this Government get back in, we will see cuts falling badly on local government, to which I shall return, and on defence, which has seen significant cuts already and no guarantees about the future. The police have been cut significantly, as well.
I find the way in which austerity cuts have been imposed on local government appalling. Local government has important responsibilities, not least for child protection
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and care and provision for the elderly, yet we have seen massive cuts. My local council, Halton, is considered to be a good and well-managed authority, but between 2010-11 and 2015-16 its Government grant will have been reduced by £46 million, or £365 per head. That is a substantial cut, and the £11 million reduction in next year’s grant represents a further cut of £87 for every man, woman and child. By contrast, the cuts per head in east Cheshire—which is in the Chancellor’s constituency—and West Oxfordshire will be £23 and £32 respectively. Scandalous, unfair cuts are hitting the most socially deprived areas in the country, and putting services in serious danger by lessening councils’ ability to fund and run them. The future Government must address that important issue.
Another big problem in Halton is housing, especially the supply of housing, including social housing, and the inability of young people to get on to the housing ladder. In response to the Chancellor’s announcement of Help to Buy ISAs, today’s edition of Inside Housing states:
“David Orr, chief executive of the National Housing Federation dismissed the move ‘as another short-term initiative for first-time buyers, not a Budget to end the housing crisis.’…The Chartered Institute of Housing has also criticised the move… ‘While the help to buy ISA may help some first time buyers to overcome barriers to home ownership, it fails to address the fundamental problem—that we are simply not building enough homes.”
Mr Bacon: Does the hon. Gentleman accept that the Budget also provides for a doubling of the number of housing zones, which do address the issue of supply?
Derek Twigg: As the hon. Gentleman will know, we have promised that if we win the election in a few weeks’ time, we will build 200,000 houses a year. That is a significant improvement on what the present Government have done. They simply have not done enough, and the fact is that there is a major problem with the supply of not just private but social housing. There are nearly 1,350 people on the housing waiting list in Halton, which is one of the smallest boroughs in the country, and the average waiting time is nine years. Housing represents a large part of all MPs’ casework, and a future Government must do something about it. I have already said what Labour will do.
The Chancellor did not say anything about the crisis in the NHS. We know that waiting time targets have been missed, that accident and emergency departments are crowded, and that access to GPs is a problem. We know that people are experiencing real difficulties as a result of waiting times, involving not just A and E services but some other procedures. We have clearly stated that we want to improve access, and to save and transform our NHS with a “time to care” fund worth £2.5 billion, which will pay for 20,000 more nurses, 8,000 more GPs, and a guarantee of cancer tests within one week. The NHS is a fundamental part of our society, and it is appalling that the Chancellor did not refer to it yesterday.
In Halton, the reality of what has happened under this Government—which the Chancellor failed to address yesterday—is that many people are in poverty and experiencing a cost-of-living crisis. People are unable to heat their homes properly, and there has been a massive
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increase in the use of food banks. Hundreds of families in Halton have suffered as a result of the bedroom tax. Many are struggling to find jobs, and, as I said earlier, a large number of those jobs are insecure and part time. Security is a key issue for my constituents and others, and it must be addressed.
1.53 pm
Chris Kelly (Dudley South) (Con): Thank you, Mr Deputy Speaker, for allowing me to make my final speech in the House. I shall not speak for too long, because I know that many other Members want to contribute to the debate.
The Chancellor’s stated goal is for Britain to become the most prosperous major economy in the world, and for that prosperity to be shared throughout the nation. As a fellow Member whose constituency is outside London and the south-east, I wholeheartedly agree with him, and, indeed, that is what we are starting to see.
The Chancellor was also right to say that no short-term giveaway could benefit people as much as a long-term recovery. That is why there were no pre-election gimmicks yesterday. Instead of short-term gimmicks, we have seen action: action on job creation and growth. Under this Government, 1,000 more jobs have been created every single day, and the Office for Budget Responsibility has confirmed that in the past year we grew faster than any other major advanced economy—50% faster than Germany, and a staggering seven times faster than France.
Dudley South is full of hard-working and enterprising people, many of whom take the plunge and set up their own small businesses. I am delighted that we will be supporting them—and the 5 million self-employed people in the country—by abolishing their class 2 national insurance contributions entirely, thus making tax simpler for those hard-working people and enabling them to get on with making a living, serving their customers, and building their businesses.
The news is also good for larger employers in my constituency. In two weeks’ time corporation tax will be cut to 20%, which is one of the lowest rates in any major economy. We are backing businesses such as Petford Tools, Boss Design and Pressvess, which are in my constituency, so that they can create jobs. Mike Wood, the excellent Conservative candidate for Dudley South, brought representatives of those companies to No. 11 recently to meet the Chancellor. By contrast, Labour’s plan for the first corporation tax rise since 1973 would put jobs at risk rather than helping to create more of them.
Business rates have not kept pace with the needs of a modern economy. Businesses in Dudley and the black country have called for a review, and will join me in welcoming the news that one is to take place. Ninder Johal of the Black Country chamber of commerce has said that, all too often, good local businesses
“have to scale back their growth ambitions because of out of control rates bills”,
and called business rates an “iniquitous tax”. I agree with him.
Labour left manufacturing halved as a share of the economy, and a bigger gap between north and south in our country. The OBR has confirmed that growth is
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now broadly based, and that manufacturing has grown 4.5 times faster than it did in the pre-crisis decade. In manufacturing areas like Dudley and the black country, the evidence is all around us.
It is clear that the Conservative party has a plan that is working. Thanks to this Government’s long-term economic plan, Britain is walking tall again. We have a growing economy, a record number of jobs and rising living standards. The deficit is down, and yesterday it was confirmed that our national debt is starting to fall as a share of the economy. However, the country now faces a critical choice. Do we return to the chaos of the past, or do we keep on working through the long-term economic plan that is delivering for this country? Let us back stability for households and businesses by committing ourselves to running a budget surplus and ensuring that our debt share continues to fall. Let us support job creators by backing business and skills that will create full employment, and by cancelling the planned rise in fuel duty that is as much a tax on industry as a tax on households. Let us choose the whole nation by investing in a truly national recovery, so that areas such as Dudley and the black country do not miss out.
Tim Yorke, finance director of Ultra Furniture, one of the largest private sector manufacturing employers in Dudley South—whom I have had the pleasure of visiting— told Dudley News yesterday:
“The announcements about minimum wage and apprenticeships were welcome, as are the opportunities to give people more disposable income through increased personal allowances and more opportunities to buy homes through the help to buy ISA.”
This is a positive Budget, and much progress has been made in five years. The simple choice that voters will face on 7 May is between the chaos of Labour, propped up by the Scottish National party, and the Conservatives—including Mike Wood in Dudley South—with their long-term economic plan, which is working. Let us stay the course.
1.58 pm
Kelvin Hopkins (Luton North) (Lab): I shall be sorry to see the hon. Member for Dudley South (Chris Kelly) leave us. I have greatly enjoyed his company as a fellow member of the European Scrutiny Committee. Although we disagree about politics and I want Dudley South to become a Labour seat, I shall miss him.
The Budget statement was a process of glib window-dressing for election purposes: let us not kid ourselves about that. It was full of holes, and it failed to mention the harsh realities of the ongoing cuts agenda—an agenda that is really about reducing the role of the state on a road to the Hayekian nightmare of a world governed by private markets rather than democratic government.
My right hon. Friend the Leader of the Opposition spoke trenchantly and, I think, very intelligently yesterday in criticising the Chancellor, and my right hon. Friend the shadow Chancellor did the same today. My hon. Friend the Member for Halton (Derek Twigg) spoke very well about the effects of the cuts agenda on local government, and on child protection and adult and elderly care. We are already seeing vulnerable people being left at risk. There are crises of child abuse and insufficient child protection, and more elderly people are suffering from dementia. All those people depend
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on local government, which is being cut. We need more resources for local government, not less, and quality care for those who need it.
Millions of people are also in need of decent homes, as my hon. Friend the Member for Halton mentioned. In Luton, we have 8,000 on the waiting list. The only real solution is to recreate and restore the council housing sector. It was first attacked in 1972 with the then Housing Finance Act, which I well remember as a councillor at that time. Subsequently, we have had forced council house sales, which have left millions on waiting lists unable to get into a decent home, and a high proportion of those council homes sold did not end up in owner-occupation; they are now being let out as private rents.
The NHS is also threatened with deep cuts and creeping privatisation, inexorably driven by Government policies. It is substantially under-resourced now. Germany and France spend about 2% more of their GDP on health than we do, and that would amount to about £60 million per constituency per year. I would like my £60 million for Luton North now. It would make a tremendous difference.
The police have had savage cuts already, with more to follow, yet at the same time they are being asked to deal with terrorism threats and child abuse, looking at historical as well as current cases. They cannot do that unless they have the resources to do it, and they need more, not less.
On the subject of the deficit, the Government have refused to take the tax gap seriously, which is in reality £120 billion a year, not the £30 billion or so that they claim. What have the Government done? The Chancellor has decided to let another several million people not fill in tax returns, which is inevitably going to reduce the income to the Exchequer and make the tax gap, and the deficit, worse. Thousands of Her Majesty’s Revenue and Customs staff have been sacked already or lost their jobs, with more to follow, yet it is estimated that senior HMRC staff collect 20 times their own salary and junior staff 10 times their own salary, so more staff means getting in many more times the cost of those staff and helps to bring income to the Treasury. It is income that is the problem, not expenditure. The Chancellor’s biggest mistake, however, which I think he may come to regret, is abolishing tax returns for many people.
Today’s debate is really about business, however. I and many others are concerned about manufacturing. What the Chancellor has failed to recognise, despite pressure from me and others, is the crucial role of the exchange rate. After 1931, we had recovery after a big devaluation; after 1992 and the collapse of the exchange rate mechanism, we had a devaluation that drove recovery; after the 2008 crisis, we had a very substantial depreciation against both the euro and the dollar. We depreciated sterling by 27% against the euro and 31% against the dollar, which saved Britain from becoming another Greece, but writ large. We have survived simply because of the ability to devalue and the Government should thank my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) for keeping us out of the euro, which will be the case indefinitely now. That devaluation has saved us from a worse fate. It has still been difficult, but nothing like as bad as it would have been if we had not been able to devalue.