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We will put economic power into the hands of those who know what their areas need, rather than leaving it in Whitehall. We will give city and county regions more power over their public transport networks, so they can set the right bus routes and operate fairer fares, as well as integrating their transport services to help working people and businesses to succeed in their areas. Unlike the present Government, we will support bus quality contracts.
Central to the future of the north-east is a fair funding system. Analysis by Oxford Economics found that the knock-on effect of the unfair distribution of cuts meant a further £1 billion loss of private sector investment in the region, a loss that we can ill afford. A Labour Government will end the bias against our poorest areas by ensuring that the funds that we have are distributed more fairly, and in a way that will allow councils to plan for the long term.
During the industrial revolution, the north-east powered the economy. When the Labour Government who will come to office in May are prioritising investment in the green industrial revolution and devolving powers to our councils and communities, the north-east will once again be able to power the nation’s economic success.
12.2 pm
Mr David Ruffley (Bury St Edmunds) (Con): A Conservative Chancellor is at the height of his powers. We see falling inflation, falling unemployment, rising living standards and healthy growth, built on the basis of deficit reduction and falling borrowing.
That was, of course, the legacy of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) in the 1990s. I was his special adviser then, and he is the man who is responsible for my being in this place. However, my right hon. Friend the current Chancellor can boast of an even greater achievement than that legacy. He has achieved stability, and put the country on the path from austerity to prosperity, from a much more difficult starting point: the great recession. On the basis of the Budget statement and the subsequent announcements that we have heard over the past few days, I believe that the current Chancellor will receive a better reward than our party received in 1997. He certainly deserves it.
I have spent about a dozen of my 18 years as a Member of Parliament focusing on Treasury matters, and during that time I have had my fair share of Financial Times headlines quoting what I have said. I was therefore grateful when, the day after this week’s Budget, the paper quoted me as praising it for being a “grown-up Budget”, which is my valedictory FT headline. I described the Budget in that way because it is demonstrably not a giveaway or a populist Budget, but a Budget that is in the national economic interest.
One of my few regrets during my time in this place is that too many of our constituents, and too many in the media, believe that we are all the same—that there is not much difference between the parties. That is probably partly due to their sense that a number of politicians and Governments are buffeted by global economic forces that they may not understand, much less control. I think that that is wrong. I have a slightly more idealistic view of nationally important economic statements such as Budgets: I believe that they should have a moral purpose.
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I should add, in a spirit of bipartisanship, that the Budgets of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) were momentous events, although I did not agree with many of the measures that he introduced. I often thought that, in the noughties, he relied too much on the flow of very buoyant corporate tax receipts that were never going to last for ever, but on the back of which he spent too much. That is something that even Tony Blair has acknowledged, believing—and I think that, on this occasion, he was right—that in 2005 we could see the beginning of the opening up of a structural deficit in the Government’s public finances. Be that as it may, the fact remains that the former Labour Chancellor, ably assisted by the right hon. Member for Morley and Outwood (Ed Balls), undoubtedly had a moral vision of where the country was going.
Emily Thornberry: I was interested to hear the hon. Gentleman say that he believed that the previous Labour Government had spent too much. He talks of being on the record, and of making a valedictory address. Is he on the record as spelling out to the former Prime Minister, or the former Chancellor, any areas in which we were spending too much, and urging us to spend less? Were there, for instance, any hospitals that he did not want us to open?
Mr Ruffley: I will give one example: middle-class welfare-ism, as it is often described. We all supported the introduction of working tax credit, a repackaging of income support and family credit, as an in-work benefit for those on low pay—it was, and is, a good thing—but it extended much too far up the income scale, and a great deal of money was spent. Most economic analysts would not deny that that spending judgment opened up a structural deficit. The country was spending more than it could afford.
Let me return to my key point. I believe that valid differences, based on a moral outlook, are exhibited in this week’s Budget, and I will shortly explain why I think that it has purpose and deserves to be praised for that. Before I do so, however, let me say that during my time here, the economic Front Benchers of the Labour party have certainly made us think. I am reminded of what Edmund Burke said in his “Reflections on the Revolution in France”. It serves as a description not just of my experience, but of what I think the Chamber is and should be about. Burke said:
“He that wrestles with us strengthens our nerves and sharpens our skill. Our antagonist is our helper.”
I want to make two points in the context of the clash of ideas to which I have referred,. One relates to the part of the country that I represent, Bury St Edmunds in East Anglia. It was looked after in the Budget in two ways. First, there was the announcement that there would be a reform of business rates, and that a considered consultation on the matter would take place in the next 12 months. Why is that important? It is important because high-quality market towns such as Bury St Edmunds rely on the shops and small businesses in the town centre. They have been hit disproportionately by the great boom in internet shopping, and we have had to acknowledge that they have significant on-costs if their business is supported by bricks rather than by clicks. The basis of business rate taxation needs to be looked at to ensure the future of our market towns. The other point is that a car is a necessity, not a luxury,
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in areas such as Suffolk, so another freeze in fuel duty—the longest freeze for 20 years—is warmly welcomed in the East Anglia economy.
I want to make a general point about job creation. We know that 1,000 jobs are being created every day under the coalition Government, of which 80% are full time and 80% are in high-skill occupations. The apprenticeship scheme, which will be seen as one of the great achievements of this coalition Administration, needs to permeate more into rural economies and areas like as mine. The excellent West Suffolk college should do more to offer courses in skilled occupations, increasingly levering in the apprenticeship scheme, so that we can have more high-skill jobs in Bury St Edmunds, Stowmarket and surrounding areas. It seems to me and many others that while Cambridge has expanded north towards Ely and west towards Huntingdonshire, not enough of the Cambridge effect has spilled over eastwards down the A14 to west and mid Suffolk, as we wish it to do.
Ours is a relatively well-heeled and successful part of the country. Like you, Mr Deputy Speaker, I was born and raised a Lancastrian. I understand that the north of England has earned a lot of brass for this country during the past couple of centuries. I am delighted that the Chancellor of the Exchequer has understood that and has been so imaginative in putting together his northern powerhouse proposition. I welcome the pilot for Greater Manchester to keep 100% of additional business rate revenue, and the devolved powers that he will give to transport for northern areas and, in Manchester’s case, on NHS and training budgets. We want that proposal to be extended to Yorkshire and the north-east, as well as to those parts of the midlands that have not yet had the benefits that East Anglia and the south-east of England have received.
My second point relates to the big fiscal judgment in the Budget, which is that we will run an overall fiscal surplus. We will not just balance the current budget by 2018-19, but have capital and current surpluses by 2020. The surplus will not be as big as the £23 billion-plus projected at the time of the last autumn statement, but it will be several billion pounds—and such a relaxation of the fiscal position is good—because we as a nation absolutely must run a surplus. Why? Because as anyone will tell you in the City, where I shall return after May, there will one day be another recession. There just will be, no matter who is in power. Above all else, what we must learn from the past 10 years is that we need to be prepared. If we do not have a surplus for a rainy day, the cuts and the squeeze on living standards will be that much greater.
At the same time as wanting to run a surplus, the current Chancellor has very clearly set out two paths that are consistent with core, right-of-centre Conservative principles—the first is that individuals who work should be allowed to keep more of what they earn to spend as they choose, not as the state chooses; and the second is that individuals must be allowed to keep more of what they save to do with what they decide, not what the state decides. That is why two sets of measures in the Budget need to be praised. One set involves the new personal savings allowance, taking 17 million people out of tax on savings, which is a modest start to bolstering the savings culture. There is also the freedom for 5 million
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annuity policyholders to get out of their policies in a year’s time if they so choose, and the flexible ISA. The other set relates to income tax. The ambition of taking lower-paid people out of tax means that in two years’ time the personal allowance will be £11,000. That will help not just the low-paid; everybody, including those who pay income tax at the 20p and 40p rates, will receive a tax cut.
Finally, I would say that I leave the House wiser and more optimistic about this country’s economic health, its future and the ability of its citizens to compete in the world. I feel hugely grateful for, and very privileged to have had, the opportunity to represent the most beautiful constituency in the country, Bury St Edmunds. I still believe that this country is, and I hope it will remain, the greatest on earth.
12.16 pm
Jim Fitzpatrick (Poplar and Limehouse) (Lab): It is a pleasure to follow the hon. Member for Bury St Edmunds (Mr Ruffley). I have the highest regard for him, as I am sure he knows, and I am sorry that he is leaving the House. He has given another eloquent and solid performance on behalf of his Chancellor and his party, but he will not be surprised to learn that I do not agree with his analysis, as I shall outline in a few moments.
Many previous Budgets have taken until Sunday to unravel. It was to the credit of my right hon. Friend the Leader of the Opposition that he immediately spotted the big flaw in this Budget. In his response, he cited the Red Book to identify that the level of cuts impacting on the public sector over the next three years will be as deep as the cuts during the past five years. Many Labour colleagues have already referred to that in the debates during the past two days.
In fairness, there were some redeeming features, as there are in every Budget. The hon. Member for Bury St Edmunds mentioned that that was true of Budgets during Labour’s period in office. Those features include the initiatives on savings and the extra money for air ambulances, while bashing the banks is always popular—the hon. Gentleman is going back to the City, but that measure has gone down well with the public—and the measures on tax evasion and avoidance clearly have universal support.
There are, however, clear dividing lines between the parties. In east London, the big ticket issues are homes, training, the national health service and the public sector in general, including the issue of local authority budgets. I and my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), who I am happy to see in her place, have not only assisted the campaign to save the local health service for the past 18 months, but are still trying to get a clearer picture of the budget for primary care in our part of east London as well as that for east London generally. There is real concern about the funding of health centres right across the country, and it is not clear whether the Budget will offer them any help.
On adult training and further and higher education, Tower Hamlets college has had a 25% in its budget during the past four years, and only this week there has been an announcement about another 24% cut. That will have a huge impact on adult training in east London; it will certainly do so in my constituency. The announcement has united the Association of Colleges, the University
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and College Union and the National Union of Students, as well as students themselves. The fact that such an alliance should come together demonstrates that the issue is very serious, and it is not just restricted to east London. My hon. Friend the Member for Coventry South (Mr Cunningham) raised it in an oral question yesterday, showing that other parts of the country are affected as well.
That announcement will also mean further cuts to English as a second language training, which is hugely important to east London. Last year, it was found that English for speakers of other languages training has already been reduced by 40% over the past five years. Such training is critical to train and educate people with English language challenges so that they can compete in the jobs market.
On policing, there seems to be something of a conundrum. Although crime figures are down, my office has supplied me with Library statistics that show that there were 825 police officers in Tower Hamlets in 2010 and 627 this year, which is almost 200 fewer. Theft is up by 8%, burglary by 24%, sexual offences by 28% and robbery by 33%. Notwithstanding the Government’s success in making efficiency savings in police budgets, at some point the pendulum is going to swing too far. We are already perilously close to that point, and, sadly, it looks like police budgets are going to be squeezed even more.
There is consensus on and support for the benefits cap, but it throws up some anomalies. In east London, a number of families live in private sector rented accommodation and are charged market rents, and the benefits cap has a disproportionate effect on their ability to live. That is one example of how a universal benefit cap affects families in London. The shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), outlined Labour’s proposals for a fairer rents policy and guaranteed rents over three years, which will go down very well in east London and elsewhere.
A number of colleagues, certainly the Chancellor, made great play of the minimum wage. Government Members have said a lot about Opposition predictions of the number of jobs that would be lost through austerity. We say that if there had been no austerity, we could have made progress a lot sooner, because when the coalition came to power the economy had been growing for a couple of months. I remind the Conservative Members that when Labour introduced the national minimum wage, they were very confident that it would cost 1 million jobs. That prediction proved to be entirely wrong. For many of us, the living wage is even more important than the minimum wage.
In Canary Wharf in my constituency there are some fantastically well-paid bankers, but 105,000 people work there, many of whom are in low-paid jobs in cleaning, security and retail. I am happy to report that the majority of companies on the wharf have a living wage policy. I would like to see the Government promoting the living wage far more aggressively than they currently do. I am sure that a Labour Government would bring that aggressiveness to bear in due course.
Mr Andy Slaughter (Hammersmith) (Lab):
Does my hon. Friend agree that the Conservatives are taking exactly the same view of the living wage as they did of
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the minimum wage? That is shown by the comments of the Tory peer Lord Wolfson, who, as head of Next, paid himself £4.6 million last year, but says that the living wage is “irrelevant”. It is not irrelevant to my constituents.
Jim Fitzpatrick: My hon. Friend makes a very good point. Low wages are costing the Exchequer, and higher, fairer wages would benefit both the Exchequer and families. That argument is borne out by statistics that show that the living wage would help not only families but the economy.
I intervened earlier on the Secretary of State for Communities and Local Government to ask him about the Institute for Fiscal Studies report on migrant labour fuelling the economy, which was reported on in yesterday’s Independent and today’s Guardian. We do not seem to have acknowledged the contribution of migrants to the economy and how they have helped it over the past five years. The Government do not deserve all the credit. As I said, the Government wasted a number of years—a point that has been made a number of times by the Opposition.
Moving towards a conclusion—I am sure you will be pleased to hear that, Madam Deputy Speaker—I want to draw attention to some comments that have been made about the Budget. The chief executive of Citizens Advice, Gillian Guy, said:
“People on the lowest income and those without savings benefit least from this Budget…Positive moves on the personal allowance and fuel duty provide some small gains for stretched households, but there was nothing to address challenges around childcare, energy bills and private rents.”
All those challenges are addressed by Labour’s programme, which will go down well with Citizens Advice.
The Chancellor might not have been happy to hear what two commentators from the right had to say. I do not often quote right-wing commentators, but the editor of The Spectator, Fraser Nelson, said:
“I wonder: how ‘independent’ is the OBR? Osborne created it, defined its remit, appointed its chairman, banned it from assessing Labour ideas”.
If the Government, particularly the Conservative party, are so convinced and confident that Labour’s plans do not stack up and that our figures would create a black hole, why not use the independent Office for Budget Responsibility to do the analysis and reinforce their argument? I find it very strange and curious that that has not happened.
In yesterday’s Times, the subheading to an article by Tim Montgomerie—I do not agree with a lot of what he and Fraser Nelson say, but they are great writers and always a pleasure to read—stated, “The chancellor’s statement was the latest example of the Tories’ risk-averse strategy and leaves them without a vision”, while the headline stated, “We need more than this dull, simplistic budget”. If the Chancellor is being attacked from the right and from the left, I assume that some people will say, “He must be getting it right, because he’s in the middle,” but Labour Members do not agree.
The Chancellor also referred a number of times to fixing the roof while the sun shines. In Tower Hamlets when Labour was in power, most of our health centres and schools were rebuilt or refurbished; more than 20 Sure Start centres and the new Royal London hospital were opened; and thousands—possibly tens of thousands
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—of council and housing association properties were raised to the decency threshold for the first time in years and in some cases decades.
I do not accept that we crashed the car. As the shadow Secretary of State, my right hon. Friend the Member for Leeds Central, said earlier, Lehman Brothers did not crash in New York because of public sector spending in east London. Labour Members not only think but know there is a better way, and on 7 May I hope people will give us a chance to show exactly what it is.
12.27 pm
Sir Tony Baldry (Banbury) (Con): I appreciate that time is tight, so a full version of my speech will be on my website: www.tonybaldry.co.uk.
First, in my capacity as Second Church Estates Commissioner and soon-to-be chair of the Church Buildings Council, I should like sincerely to thank the Chancellor for the £40 million announced in the Budget towards the repair of church roofs. That is in addition to the £15 million made available for the church roof funds by the Chancellor a little while ago, and the £20 million made available for repairs to our cathedrals. In the past year the Chancellor has made available £75 million for the repair and restoration of cathedrals and churches, and that is in addition to the money he made available earlier in this Parliament to offset for churches and cathedrals the costs of VAT on repairs and renovation. I can think of no similar time when any Chancellor has made available such sums for church and cathedral repair.
For many people the presence of a church in their community is symbolic of the nation and a source of support and comfort even for those who are not regular churchgoers, and we are constantly seeing what more we can do to make church buildings more serviceable to the wider community so that they can be used as much as possible, and not simply for Sunday worship.
Not surprisingly, immediately after the Budget statement the Archbishop of Canterbury tweeted that
“money for church repairs will create local skilled jobs, improve community facilities and protect heritage, most welcome.”
As a trustee and member of the organising committee of Agincourt 600, may I also sincerely thank the Chancellor for the £1 million that he has allocated for the commemoration of our victory at Agincourt? There is a broader point here: the Chancellor and the Secretary of State for Culture, Media and Sport have been able to give support to cathedrals and churches, the 600th anniversary of Agincourt and other things only because the Government’s long-term economic plan is working and, as a consequence, the Chancellor has the necessary financial resources.
This year’s Budget has to be seen against the achievements of the past five years. The coalition Government inherited an unholy mess from the Labour Government of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). There was an enormous public deficit. Perhaps the most appropriate epitaph on the last Labour Government was the very telling note left by the last Labour Chief Secretary, which simply said, “Dear Chief Secretary, I’m afraid to tell you there’s no money left.”
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Under the Chancellor, the mending of the public finances is well under way. The Treasury has stuck to its spending plans, and the gap between what the Government receive in tax and what they spend will be roughly half what it was when Labour left office in 2010. Moreover, falling inflation means that the deficit in 2015-16 is likely to be £2 billion to £3 billion lower even than the amount pencilled in by the OBR at the time of last year’s autumn statement.
Britain now has the fastest-growing economy in the world. Its growth last year was faster than that in any other major industrial economy, including the United States. More than half a million new jobs were created last year alone and unemployment is half what it is in the eurozone. The other day, I asked my right hon. Friend the Secretary of State for Work and Pensions:
“In the past five years, how many people have moved from benefits into work?”
“The record now for people moving from benefits into work is remarkable. Some 600,000 have moved back into work. Peak to peak, the figure is over 800,000, and we have many, many more people back in employment. There have never been as many people in work and that number is still growing, with some 700,000 vacancies in the jobcentres every week.”—[Official Report, 9 March 2015; Vol. 594, c. 20.]
We now have the lowest claimant count since 1975.
That significant and sustained fall in unemployment is reflected in my constituency. When I was first elected more than 30 years ago, the unemployment rate in and around Banbury was over 14%. Today, the unemployment rate in my constituency is significantly lower than 1%. The Banbury jobcentre, according to Jobcentre Plus, has just 17 claimants who have claimed continuously for two years and can be considered to be long-term unemployed. The most recent data show that 97.8% of claimants in the Banbury constituency leave jobseeker’s allowance within 12 months of their claim.
It is worth recalling that after my right hon. Friend the Chancellor’s first Budget in 2010, the temporary leader of the Labour party, who is now the deputy leader of the Labour party, claimed that the 2010 Budget would “throw” thousands of people out of work. Labour was wrong about that, as it was with all its other forecasts. It is worth recalling all the numerous scare stories that have been run by Labour, such as the suggestion that there would be a triple-dip recession, all of which have turned out to be completely unfounded. At no time during any Labour Government have so many jobs been created in such a short period of time as has happened on the Chancellor’s watch since 2010.
The increase in economic activity is not restricted to London and the south-east, but is being felt across the UK. Business investment is higher than it was a year ago and the latest trade figures show that the gap between exports and imports is narrowing. It is not surprising that the OBR has upgraded its growth forecast this year from 2.4% at the time of last year’s autumn statement.
North Oxfordshire has a vibrant economy based on a large number of small and medium-sized businesses, many of which will very much welcome the Chancellor’s wide-ranging review of business rates. I represent two market towns, and I am sure that high street shops in particular will welcome the business rates review. They feel that the present system places them at a disadvantage
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compared with online competitors, because business rates are charged only on bricks and mortar. One cannot create jobs without successful businesses.
Business rates are in need of far-reaching reform. The system means that some small shops on busy high streets pay high rates, while online giants such as Amazon, which have large warehouses in cheaper locations, pay less. We need a resurgence of help for independent shops so that they can compete fairly with online businesses. Victoria Prentis, my successor as the Conservative parliamentary candidate for north Oxfordshire, is already organising meetings with the local business community, so that she can hear first-hand their thoughts and views on the Government’s consultation on business rates.
It is clear that the Chancellor is determined to help hard-working people by raising tax allowances. He has increased the amount that people can earn without paying income tax. In last year’s autumn statement, he said that the personal allowance will be £10,600 from this April. In the Budget, he announced further progress by outlining his plans to raise the personal allowance to £10,800 next year and £11,000 the year after. Let us be clear about what the Chancellor has achieved: the Budget means big tax cuts for families, because significant increases in personal allowances are tax cuts. As a consequence of the Budget, 27 million people will have their taxes cut through the raising of personal allowances. Through the raising of tax allowances, almost 4 million people on low wages have been taken out of the income tax system altogether. That is a very popular policy. It is what people want.
Many people also want to own their own home. I very much welcome the fact that first-time buyers will be able to benefit from a new Help to Buy ISA, which will offer a tax-free way of saving to buy their first home. The Treasury estimates that 285,000 first-time buyers will use the scheme every year. Someone who is trying to save a 10% deposit for a £150,000 home will have to save £12,000 and the Government will contribute £3,000, taking the total to £15,000. It is effectively a tax cut for first-time buyers.
I welcome the fact that Cherwell district council in my constituency is taking the lead in promoting more housing, with a new garden city at Bicester and the largest self-build scheme in Europe. The Help to Buy ISA will give further assistance to those self-builders, as well as to other first-time buyers in my constituency and elsewhere.
There is a lot more that I could say in support of my right hon. Friend the Chancellor’s Budget. However, colleagues and other people will have to read it on my website, because I am conscious that many other Members wish to speak in this debate. This will almost certainly be my last speech in the House of Commons. I am glad that I have been able to make it in support of the Chancellor’s Budget.
In 47 days, the nation will go to the polls. People will have a straightforward choice as to whom they wish and whom they trust to be Prime Minister: the Leader of the Opposition or my right hon. Friend the Prime Minister. I have every confidence that the nation will put its trust in the Prime Minister. I, like every other Conservative Member, will spend the next 47 days bending every sinew to help ensure the Prime Minister’s return to government and No.10 on 7 May.
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12.37 pm
Rushanara Ali (Bethnal Green and Bow) (Lab): The Budget painted a distorted picture of our society—one that people living in constituencies such as mine will struggle to recognise. There are low wages, almost 1 million people are not in employment or training, some 750,000 young people are still unemployed and the average family is £1,200 a year worse off under this Government.
The Chancellor told us that the sun was shining. I do not know what planet he is from, but the sun is certainly not shining for most people across the east end, where my constituency is situated. The idea is at best hollow and at worst insulting to people who are struggling, people who are having to rely on food banks and people who are struggling to pay their bills, yet the Chancellor has the nerve to say that the sun is shining. Perhaps it is shining on his friends, but it is not shining on the vast majority of people in this country, who are struggling to make ends meet.
The Chancellor’s proposals will mean further cuts in health, education, social care and many other public services. He boasted of a “truly national recovery”, yet in my constituency and across the nation, people are simply not feeling that recovery. They are feeling the squeeze on their living standards and they are feeling deeply stressed because they are working incredibly hard but their salaries are not rising.
Child poverty has been rising over recent years. In my constituency, the rate of child poverty has risen to become the highest in the country. One in two children now lives in poverty. That is a disgrace. That situation is affecting millions of families around the country, yet this Government have failed to deal with the challenge of child poverty. They have redefined child poverty rather than tackled its root causes.
Some 22,000 people in my constituency and the constituency of my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) are stuck on housing waiting lists. Week in, week out, we meet people who are stuck with disabled family members who need appropriate housing, but who cannot be rehoused because the Government are not building enough social housing, not just in London but around the country.
We also face high long-term unemployment, with long-term youth unemployment across the board at 30%. Youth unemployment for ethnic minority young people has risen in the past five years by 50%. That is a disgrace and it shows that the Government do not care about inequalities across racial groups. They pay lip service, but do nothing about the substantive inequalities they have presided over. They have watered down anti-discrimination legislation and cut the budgets of equality agencies that regulate discrimination. The Government need to think again about the massive racial and social-class inequalities that are affecting people around the country. They have done nothing to help those who face the burden of child care costs, and they have failed to deal with the many young people who are desperately looking for appropriate training and work. It would have been a great help had they said to young people, “We will give you a job guarantee and the appropriate training so that you can get an opportunity and a foot on the ladder.”
We need a much better proposition for the vast majority of people in our country who are still struggling and cannot see any hope or light at the end of the
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tunnel, despite the Chancellor’s reference to the sun shining. What they see and have experienced is a bleak proposition and future, and the Government have promised yet more cuts to the very services and help that those people desperately need to provide the springboard for them to succeed. The Government have said nothing about the need to tackle the millions of people now working on zero-hours contracts.
Hundreds of carers came to see me this week. They are looking after people but are on zero-hours contracts, do not have proper recognition, and are not being paid properly. This Government have closed Sure Start centres up and down the country, and many more will close because of their proposals to make stringent cuts, due to their ideological obsession with slashing and burning. That has not changed, even though we heard a lot during the last election about a new kind of Cameron Government—a compassionate Conservative Government. That is utter nonsense, and the people of our country can see the true colours of this Tory Government, despite the so-called progressive influence of their Liberal Democrat friends, which is frankly a scandal. The Liberal Democrats propped up a Government who have been vicious in their impact on communities across the country, including in my community and across the east end.
As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) said, we have been trying to fight off cuts to GPs surgeries—five were at risk of closing and we had to take to the streets to stop them closing for just two more years, although they may still close because the Government have not provided any assurances. Some 99 surgeries across the country are affected, including 22 in the east end where health inequality is scandalously high, yet the Government’s Health and Social Care Act 2012 failed to make tackling that one of their key objectives.
We have had to fight the closure of police stations. Yesterday I went to campaign for Matthew O’Callaghan in the constituency of the Education Secretary. Her constituents were saying that local police stations have closed and local council offices are used for people to make complaints that would otherwise have been made to the police. That must be done during office hours, so in an emergency there is nowhere to go, and nowhere to report a crime and receive a crime reference number for serious incidents. That is in the Education Secretary’s constituency. In other areas lights are being switched off, which is affecting women’s safety, including in the constituency of the Secretary of State for Communities and Local Government.
As my hon. Friend has said, constituencies such as ours face record cuts to further education. Nationally there are some £70 million of cuts to further education colleges, which 4 million people attend. I know that they will be rallying with their teachers, trade unions and anyone who will support them to tell those seeking election this May that their rights and needs must be understood. Parliamentary candidates, whoever they are, need to show that they care about the education of those 4 million people who attend further education colleges. This Government have slashed and burned, and ruined the hopes of those people. I call on people to take action and ensure that every parliamentary candidate prioritises the needs of their education and training.
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If they do not, people must ensure that parties and candidates who are not willing to support adult education and give people hope are shown at the ballot box that a difference can be made and that people’s political power is vital and will be exercised. That is 4 million members of the electorate. I hope the Government take note of their power because they will use it and demonstrate that it is not okay for the Government to come in, slash and burn, and cut off the hopes and aspirations of 4 million people who go to further education colleges.
The IFS has said there has been little detail about the cuts that the Government propose, but the poorest will bear the brunt of the likely cuts in public services. I hope the Government will set out exactly where they will make cuts, because up and down the country people are desperately worried that the cuts will fall on the NHS or local schools. The Government have already said that they will cut across budgets, including in education, and we must know where those cuts will be made. It would be fundamentally dishonest of the Government not to set out where they will be. I hope that the Government will be straight with the public and not try to deceive them—[Interruption.] If Conservative Members want to say something they should have the courage to do so; otherwise they should keep quiet. The public have heard enough from the Government and are fed up with them, as are Labour Members.
There are two visions of what is at stake in the coming weeks ahead of the general election. The Government’s plan is to impose deeper cuts over the next four years and put public services such as the national health service in harm’s way. That means more homelessness, more food banks, and less protection for the elderly who need care. It means more poverty, inequality, social division and social disunity. It means a much harsher society—I remember that clearly from when I was a child in the ’80s and we had to live during the Thatcherite period. It means a society where people are left behind in their millions. That is not the society Labour wants.
We propose a society that is united, has inclusive growth, and where we look out for those who are less well-off, give people hope and support their aspirations—a society where we invest in training and education so that our future growth is dependent on those who succeed, through investing in their education and giving people support and the opportunity to contribute to our country. It means investing in our national health service so that those who need care can get it, rather than having to rely on a poor service because we are not investing in health care—the NHS is still considered the best value health care in the world, and we should be proud of what we have achieved as a country. We must ensure that we support those who earn the least by investing in a national minimum wage, and support parents through child care. I hope that on 7 May people will look at those two visions and see ours as a progressive inclusive vision that will unite our country.
12.49 pm
Sir James Paice (South East Cambridgeshire) (Con): Like so many of my right hon. and hon. Friends, I expect this to be my last speech as a Member of this House. I can reflect over 28 years not least on the fact that, as I began, here I am being called towards the end of a debate and speaking to a Chamber that is virtually empty. In that regard, I am finishing in a situation similar to that in which I started.
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I remind the House of my entry in the Register of Members’ Financial Interests. It will not surprise hon. Members that I wish to refer to one of my interests—agriculture. I welcome the Government’s decision to allow farmers to average their profits over five years rather than two. One of the great unnoticed issues relating to agriculture, which most Members have not registered, is that for the past 10 years there has been no direct market support. Farmers are now quite rightly—this is no criticism of policy, but a reflection on the change—dependent on world markets for the prices they receive for their products. One consequence of that, however, is massive market and price volatility; hence the logic of averaging taxes over five years. I urge the Exchequer Secretary to the Treasury, my hon. Friend the Member for Witham (Priti Patel), who I assume will respond to the debate, to look carefully at the start date. The situation is dire today. Farmers, particularly those in the dairy sector are losing a lot of money, and if the new system does not start until April 2016 it will miss the people who need help now. I hope she will look again at the start date.
I welcome the announcement in the Budget of investment in a centre for agricultural informatics. Farming is now a highly technical industry. Much of the credit for the research involved goes to, as has been said, my right hon. Friend the Member for Havant (Mr Willetts), who spoke earlier. He, of course, comes from the intellectual wing of the Conservative party—not an accusation that has ever been made about me—and he has done a fantastic job in government to support science and research. He has been probably one of the best Ministers in this Government and in the whole period I have been in this House.
My other general interest is in rural communities. I, like others, strongly welcomed the announcement on rural broadband. When I saw the reference in the Red Book to ultrafast broadband, I could not help but reflect on the fact that much of my constituency would be very happy to have any broadband at all, never mind ultrafast. I then read the next paragraph, which said that the Government are considering the introduction of the universal service obligation. Much as I dislike that level of compulsion in principle, I fear it is essential. I hope the Government will implement it. It is particularly important, given how many public services are now delivered online. It is not only the tax changes announced by the Government; farmers also have to submit all their applications and reports online.
I have had the joy and privilege of representing my constituency of South East Cambridgeshire for 28 years, and there were some specific gems in the Budget that I welcome and are relevant to my constituency. The establishment of a horserace betting right is of huge value to the racing industry around Newmarket, which is the local economy I share with my right hon. Friend the Member for West Suffolk (Matthew Hancock). It is a vital part of our economy. It is estimated that about 7,000 jobs in the immediate vicinity are dependent on the racing industry, so I welcome that.
As a Cambridgeshire MP, I strongly welcome the announcement that Cambridgeshire will, along with Greater Manchester, pilot the retention of extra business rates. Cambridgeshire has been one of the powerhouses of Britain’s economy for the past 20 years, a spin-off from science. The Cambridge science park in my
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constituency is tremendously successful, with cutting edge research into biotech, IT and virtually every, often unfathomable, aspect of science. The spin-offs, and the advent of other businesses moving into the area, have been tremendous. It is right that Cambridgeshire, which is one of the lowest-funded authorities in the country, should have the ability to keep that extra business rate retention. On the same front, I hope the next Conservative Government after 7 May will introduce fairer funding for schools so that those counties, including Cambridgeshire, right at the bottom of the pupil funding figures will get a far fairer allocation of resources.
Another aspect of the Budget relating directly to my constituency is the confirmation of improvements to the A14, due to start in 2017. We have been here before, but I will give the Government the benefit of the doubt this time. It is only two years away and therefore more likely to happen. I hope it will. This comes hard on the heels of the announcement, in the last round of growth funding, that we will have the money for the Ely bypass in my constituency. Again, I hoped that that would have started before 7 May. Unfortunately it will not, but I hope that that is very much unstoppable.
I shall now turn to a couple of wider issues, if I may, in this my swansong, Madam Deputy Speaker. One of the issues raised today—we are of course discussing aspects of the Budget relating to local government—is housing and planning. The one issue that has not really been addressed—I fear it has not been addressed for many, many years—is how to ensure that the huge bank of outstanding planning permissions that have been granted are actually implemented. If that were to happen, many of our immediate housing issues could be resolved. That is a huge challenge for the Government. I am not an advocate of taxation as a weapon—I will come to that in a moment—but I cannot help feeling that those businesses, or anybody who has a property or land with existing planning applications, should suffer some sort of ascending tax until they carry out the development for which they have consent.
On the wider issue of tax, one of my big regrets of my time in the House is that there is still not a common recognition that tax optimisation—in other words maximising the yield of income tax, which most of us want to see to pay for the public services we all espouse—is not the same as automatically raising tax levels. In fact, there are countless examples—under Conservative Governments, particularly those of Margaret Thatcher—where cutting tax levels has led to an increase in yield and in the contribution of the better off who were being forced to pay the higher tax rates. That has happened time and time again, yet still we hear from the Labour Benches ongoing claptrap about the ramping up of tax rates automatically yielding more money and that the rich should pay more. I do not believe that tax is a weapon for social engineering. It is a vital mechanism to pay for our public services, but all forms of taxation should be set at a level that optimises yield, does not deter reward and investment, and does not detract from future yields. It is all very well saying, “We’re going to increase it this year.” because the yield probably will go up, but in ensuing years, as people find alternative ways to handle their money, it will go down and that revenue will be lost.
I have never really envisaged leaving this place, not that I suppose anybody does. It has been a very short 28 years. I have been proud and privileged to represent a
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constituency that has been vibrant economically through all of that time, with science parks and research, and the traditional industries of agriculture and engineering. Virtually every sector of British industry is represented in my constituency, including the horseracing industry. I believe the essential values that brought me here—care and concern for rural communities, and the value of enterprise in generating wealth for the betterment of all of us—have served my constituency well. They have guided me through the past 28 years. I believe they have guided the Conservative Governments I have been proud to have been a part of on two different occasions. I believe they will guide the Conservative party, which I hope and believe will be elected to govern on 7 May.
12.59 pm
Emily Thornberry (Islington South and Finsbury) (Lab): It is a pleasure to follow the right hon. Member for South East Cambridgeshire (Sir James Paice), whom I wish the very best in retirement. That said, he is wrong about there being a Conservative Government following this one. It is clear that of all the results at the next election, a Conservative Government is the least likely.
The Budget was all about the election—there were two Budgets really. There was the reality and there was the rhetoric, and it did not take long for the rhetoric to start unravelling. Fortunately, some of the nonsense we were subjected to we will not need to hear again for some time. The pared-down, sanitised version of the Budget the Chancellor presented could be quickly unpicked simply by looking at the Red Book, which confirms our very worst fears: on public spending cuts, he and his party are just getting warmed up. On Wednesday, he claimed that living standards were higher this year than when they entered office, but on Thursday the ONS and independent think-tanks criticised his wildly inventive use of statistics. Facts and evidence had little role in his “Alice in Wonderland” version of the Budget—up was down, down was up, and a word meant whatever he said it meant. It was a transparent attempt to argue the opposite of what Opposition Members know: that under this Government, living standards have fallen and the poor are getting poorer. The impact of their reckless decisions has fallen most heavily on those least able to bear it.
Today, the Secretary of State for Communities and Local Government took up the baton in the same spirit as the Chancellor. Of all the extraordinary things he said, the thing that really struck me was his claim that the Government were building the homes the public wanted. In my constituency, the best he is likely to get for that is a politely hollow laugh. In my constituency, the average house price is £660,000, according to latest figures. How will Help to Buy ISAs help with that? How much will £15,000 in the bank help with that? It is evidence of the Government’s lackadaisical attitude to the housing crisis—stimulating demand but doing nothing on the supply side, promoting home ownership while offering nothing to the millions of private renters struggling to make ends meet.
It is often said that politics in Islington begins and ends with housing, and it is not difficult to see why. Every week, I am overwhelmed by the number of people who tell me how much they are struggling to make their
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monthly rent payments, pay the bills and buy essentials such as food, fuel and child care. People think they know about Islington, but they don’t: we have the sixth-worst child poverty rates in the whole country, and 40% of my constituents live in social housing. In many ways, we are a constituency of two halves, and we are separating out, and it is getting worse under this Government.
I would like to give the Chancellor a dose of reality—I would like to tell him about some of the people I have the honour to represent—but I shall begin with a few facts. Renting a flat in Islington privately now costs an average of £600 a week. Now, the Government will say it is unfair for people on benefits to get more than the average wage, and in principle I agree absolutely, but the difficulty is that if we include rent in benefit payments, and if the income cap for those on benefits is £500, it does not take much wit to work out that the vast majority of the money goes to the landlords, not to the family. As a result, people are being forced out of Islington and London, as far as they can go, but instead of dealing with prices and the housing crisis and building more affordable homes in my constituency and central London, the Government are penalising those who can least afford it and are least to blame.
A constituent came to see me two weeks ago. She has three children; she survived polio as a child—her legs are in a terrible state; she lives in completely unsuitable private housing, and has to climb 28 steps to reach her front door. It is temporary housing she has been in temporarily for four years while the council has been looking for somewhere to put her. For this, she has the privilege of paying—or the Government do—£400 a week, meaning that this disabled woman and her three children have £100 a week to live on. Is the sun shining on this family? Are things getting better for them? No, they are not.
Unsurprisingly, rents are running out of control in this area. In places such as Islington, social housing is the only realistic option, yet, despite the council’s best efforts, there are 19,000 people on the housing waiting list. In Islington, we currently have a joke: the council is working so hard to build social housing that if someone moves their car in the morning, when they come back there will be a flat there. It is doing its utmost to build social housing, but, with the withdrawal of the Government subsidy for councils to build social housing, it is hard. It is doing everything it can, and I applaud its efforts, but it is as if we are running as fast as we can and still going backwards.
Mr Slaughter: My hon. Friend is making a powerful speech. She mentioned the Help to Buy ISAs. The money the Conservatives would spend on that would build 69,000 affordable homes. Is the attitude of Conservatives not really shown by councils such as Tory-controlled Hammersmith, which sold 315 council homes on the open market, meaning that 315 families will now be in private rented accommodation and presumably subject to the benefit cap?
Emily Thornberry: Yes, and the irony is that when properties are sold and the council is allowed by the new owners to rent them on the private market, the tenants are told they have to live in the property for a huge amount of money that is then paid in benefits. It is no wonder that the benefit bill and the cost to the Government are rising.
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We need to step back and look at the situation realistically. If rents are far too high, what do we do? We need to build more. If we do not, rents will continue to rise. We have to take control of the housing situation, particularly in areas of high demand, such as central London. We cannot leave it to capitalism red in tooth and claw to deal with the housing crisis in Islington. We have to intervene, and we have to believe that it is the best way of dealing with it; otherwise, we will continue to have huge unfairness.
A man and his partner and baby came to see me. They desperately want a home of their own, but they cannot afford to rent privately, so they are living with mum. Their house is completely overcrowded—it is totally unsuitable—but they have no alternative, and they will be there for years. I have another constituent living in overcrowded accommodation who has made 76 bids to move home, but she has still not been successful. Another woman is in arrears for the bedroom tax. She has had discretionary housing payments, but they were only small, and she remains in debt and is desperately worried about what will happen to her. She wants to move, but there is nowhere for her to move to.
A woman came to see me—she is not really a priority, I appreciate that—who lives in a one-bedroom flat with two children and two adults. This is like the 1920s. We are going backwards in time. People are living like this today. This family are not a priority; they are not the worst case, and their chances of getting re-housed are slender because they are only overcrowded by way of two adults and two children in a one-bedroom flat. I had a letter from another woman about high rents in the private sector. The sun is not shining on her house. Her flat is cold and damp, and there is only one radiator. Another family came to see me—four adults and two children in a two-bedroom flat.
Does this Budget solve any of these problems? Does it even think about them? It denies their existence and makes no attempt to address the problems arising just a stone’s throw from this building. We cannot continue to put our heads in the sand. We need a Government who care and are prepared to address these problems, not continue to talk in “Alice in Wonderland” terms about the sort of world we want. “We choose the future”, the Chancellor said. Well, the Government do not choose the future for the people I represent. They should be ashamed of themselves, and they will not be in government for long.
1.9 pm
Iain Stewart (Milton Keynes South) (Con): It is a pleasure to speak in this debate, alongside many right hon. and hon. Friends who sadly are stepping down at the general election. I shall be sad to see many of them retire, and I think the House will lose a great deal of wisdom and experience. Let me say for the record, however, that I do not intend this to be a valedictory speech! I hope the good electors of Milton Keynes South will return me in 47 days’ time.
I welcome the long-term nature of this Budget, and I believe the Chancellor is to be commended for not yielding to the temptation of using the better than expected fiscal position resulting from our strong economic performance as a windfall for short-term gains. Instead, he has stuck to his guns and sought to get the country back to living within its means.
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It is easy to forget just how close to the brink this country was five years ago. We have heard from some speakers today a rather rose-tinted view of our position in 2010, but it is worth thinking about just how precarious our financial position was. It has been an incredibly difficult job in a very turbulent global economic situation to get this country back on track. Interruption.] I hear hon. Ladies opposite saying from a sedentary position that the problems were global. Yes, but in case they have forgotten, there has been a small problem in the eurozone, and this country started from a much weaker position because we ran up a structural deficit, which made the challenge even more difficult to deal with.
We must stay on course to eliminate our deficit and then start repaying our debt. That is not dry economic theory or dogma. An interesting table in the Red Book shows what the Government will spend in 2015-16. Next year, we will spend £35 billion on debt interest payments—not repaying the debt, just paying the interest to service it. That is more than we are spending on transport, on industry, agriculture and the environment and on public order. It is money that is not available for spending on defence or the NHS or infrastructure, and means passing on more bills for the next generation to take up. Addressing our debt addressed is also important for our national security. The money we borrow has to be lent by someone. The greater our debt, the more we have to borrow from other countries. The savings glut in many far eastern countries in recent years has meant that borrowing has been comparatively easy and cheap, but that might not always be available or desirable, so we are right to stick to our plans to look to the long term and pay our way as a country.
I warmly applaud the Budget measures on savings and pensions, and particularly the encouragement of personal savings that we have seen in this and previous Budgets. I do not want to encourage the stereotype of a Scotsman and his money, but I say that we need to save more as a country. That is right for the long term. Just as it is right to reduce the country’s debt, so it is right to reduce personal debt that is not secured against an asset. I warmly applaud the abolition of tax on savings for many people. Double taxation is wrong, and people were paying interest on their savings on money that they had invested after taxation. I welcome, too, the pensioner bonds that were introduced in previous Budgets as they give a higher rate of interest to pensioners, and I welcome the greater flexibility in ISAs. Encouraging saving is good for our economic security.
Let me raise one concern, however, about an otherwise excellent Budget. I refer to the restriction of the lifetime personal pension allowance. I completely understand that, as part of our objective of getting our books back in balance, we have to keep a close eye on every single item, and I accept that the cost of this allowance has gone up by £4 billion during this Parliament. It is completely understandable that we have to keep it controlled in the short term. I welcome the Chancellor’s rejection of restrictions on the annual allowance and the fact that the lifetime allowance will be indexed from 2018.
I do hope—let me make a plea perhaps not for the next Budget, but for several Budgets down the line—that as we get our finances back into the black, the lifetime allowance limits will be revisited. I say that not just because it is right to encourage the savings culture, but because it is sustainable in the long term in that the tax
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forgone on pension contributions is only deferred and not lost. When people draw down the income from their investments in the future, the Government will gain. It is important because pension funds will be increasingly significant for funding investments in our infrastructure.
My right hon. Friend the Member for Havant (Mr Willetts) is no longer in his place, but both he and the right hon. Member for Somerton and Frome (Mr Heath) alluded to the important pension reforms that this Government have made. The attack by the previous Government on one of the best pension funds we had, when they abolished dividend tax credits, caused huge problems for a situation that was previously well into the black. The reforms we have made have put us back on a sensible course.
I have one specific question for my hon. Friend the Exchequer Secretary. It was raised by my constituent Nicholas Clarke, who will be affected by the reduction in the lifetime limits on pensions. He has done the right thing by his family and saved into his pension fund, and he hopes not to be too far away from taking retirement. In the 2014 Finance Bill, an individual protection provision was introduced when the allowance limit was reduced previously. If the Minister does not have the information to hand, perhaps she will write to me about whether it is likely that a similar provision will be introduced to coincide with this reduction. This information would be most helpful to constituents such as Mr Clarke in planning for their retirement.
In the last few minutes, let me turn to a couple of themes relevant to the local government focus of today’s debate. On housing, I very much welcome the Chancellor’s announcement of the new Help to Buy ISA, which will be particularly useful in constituencies like mine. Our demographics show that the children of young families who moved to Milton Keynes in the 1980s, when there was a big expansion in growth, are now at an age when they want to buy their own homes. It is a perfectly natural and laudable aspiration. This new ISA, along with the stamp duty reform in the autumn statement, will help people to get their foot on the housing ladder.
Reference has been made to housing supply. In Milton Keynes, we are delivering. Our core strategy, agreed in 2013, provides for 28,000 homes over the next decade or so. The Government have helped to bring forward some of these developments—at Newton Leys in the western flank of my constituency, for example. I endorse the point made by my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), who said that we need to do all we can to bring forward these developments.
I have some concerns. Some in Milton Keynes want to go outside this plan prematurely and look at other developments—at Salden Chase, for example. I think that is very short sighted. We should consider further expansion only when it is part of a broader and more strategic view that takes into account other developments such as the new garden cities at Bicester and other places nearby. If I am returned in a couple of months’ time, this is a civic discussion that I wish to lead.
Finally, and not unrelated, is the reform of business rates announced by the Government. I very much welcome it. Under the current system, Milton Keynes pays out far more than it receives, and I would like this review to
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look at that balance. I was very concerned by some of the comments of the right hon. Member for Leeds Central (Hilary Benn), particularly when he said that a Labour Government would look at rebalancing the distribution of support from central Government. I worry—Labour has not been open about this—that this will mean taking money from fast-growing areas such as Milton Keynes and redistributing it elsewhere.
I note with pleasure the Chancellor’s invitation for other areas to replicate what has been proposed for business rate retention in Manchester and in Cambridge. If re-elected, I shall encourage Milton Keynes council and the business community there to beat a path to his door to see whether we can arrange something similar. That will be important for funding the additional infrastructure we need if we are to continue to grow our housing.
I would also welcome the rebalancing of business rates between the large-scale businesses and the small high-street ones. I have both in my constituency: I have everything from the big John Lewis distribution centre right down to small and wonderful local shops.
This is a good Budget for the long-term success of Milton Keynes and the United Kingdom as a whole. I look forward to participating in our further growth in the next Parliament.
1.20 pm
John McDonnell (Hayes and Harlington) (Lab): I wanted to focus on the issue raised by the right hon. Member for Somerton and Frome (Mr Heath) with regard to tax avoidance, but today’s theme is local government, and the right hon. Member for Uxbridge and South Ruislip (Sir John Randall) referred to the London borough of Hillingdon, and that prompts me to make a passing reference to that local authority, which I share with him. I do not recognise his depiction of its Conservative administration. In my constituency, Conservative control of that borough has created, through callousness and incompetence, the worst housing crisis since the second world war, with families living in overcrowded squalor, and hundreds now in bed and breakfasts, shunted around the country just to find a roof over their heads. The cuts in the planning department and the lack of enforcement on beds in sheds and so forth mean that some areas of my constituency are now beginning to look like a shanty town. The council is building on the green belt despite owning brownfield sites. That is because it is selling off those brownfield sites in my constituency in order to subsidise the development of facilities in the right hon. Gentleman’s constituency, and in Ruislip and Northwood as well.
I also live in a local authority where social services and care services are perilously close to collapse and where staff are working in an environment of bullying and fear. The Conservative councillors who lead the council seem more interested in increasing their allowances than the interests of my constituents. I just make passing reference to the London borough of Hillingdon.
I shall turn now to the issue I wish to raise: tax evasion and avoidance. The Budget sets the target of raising £3.1 billion through tackling tax evasion and avoidance. The Government have identified a tax gap of £35 billion, which has remained almost static for the past few years, but one of the World Bank auditors has
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said it is nearer £100 billion, and the tax justice campaign and the Public and Commercial Services union, which represents the tax collectors themselves, has put it at £120 billion. So on the Government’s own figures, at best we are simply going to tackle, if successful, less than 10% of the tax gap, but more realistically less than 3%. That is a dismally low target.
In yesterday’s HMRC and Treasury document on tax avoidance and evasion, I welcome the statements around strict liability, naming and shaming, the toughening up of penalties and the tackling of serial avoiders, but it has taken five years of lobbying by the Tax Justice Network and others—and I pay tribute to Richard Murphy, Prem Sikka and John Christensen. It has also taken direct action by UK Uncut, media campaigns and public pressure to get the Government to act—in their last week. But it is not action—it is not deeds; it is further consultations. This is an appalling missed opportunity.
The right hon. Member for Somerton and Frome—who is not in his place, which I understand as it has been a long debate—referred to issues to do with accountancy firms, and I agree with him. The Government’s document of yesterday places heavy reliance on those agencies at paragraph 3.19:
“Today, the government also announced it is asking the regulatory bodies who police professional standards to take on a greater lead and responsibility in setting and enforcing clear professional standards around the facilitation and promotion of avoidance to protect the reputation of the tax and accountancy profession and to act for the greater public good.”
There is a level of either complicity or naivety here. I think this demonstrates corporate capture of this Government and the Treasury by the accountancy firms, finance houses of the City and corporate law firms.
The Government are now relying on these agencies once again to police themselves. On the corporate lawyers, the Law Society tax committee is populated by corporate lawyers representing firms promoting the tax avoidance schemes. On the accountancy professional bodies, the standards and policy committees comprise the representatives of the firms making billions of pounds from designing, promoting, selling and implementing tax avoidance schemes on an industrial scale, as the Public Accounts Committee said. I refer Members to Prem Sikka’s latest article. He points out that
“the Institute of Chartered Accountants in England and Wales was formed in 1880. Here we are in 2015, and not a single accountant or accountancy firm has ever been disciplined by the ICAEW even when the schemes marked by the Big Four firms have been declared to be unlawful by tax tribunal and courts.”
Then there is the question of who is going to prosecute these firms now that we are going to introduce more criminal legislation against them. Will it be the Serious Fraud Office? Its budget has fallen from £52 million in 2008 to £35 million now. It is hardly equipped to take on these mega-corporations. In fact it is now facing lawsuits for damages from botched investigations—from the Tchenguiz brothers—and is “utterly unfit” to investigate or enforce the legislation the Government are bringing forward.
The Crown Prosecution Service is “hardly visible” with regard to prosecution of big corporations, and HMRC staffing cuts have denied it the professional expertise needed. I will come back to the staffing cuts.
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Emily Thornberry: Does my hon. Friend agree that it would be an improvement in the law if there was corporate liability for the criminal acts of individuals within companies? In other words, if someone behaves dishonestly on behalf of a company, the company itself should be liable. If that law were in place, as it is in the United States, it would help with prosecutions in this country for fraud and dishonesty.
John McDonnell: Exactly, and there is some movement on that in this document, but only yet another consultation that does not define whether individuals as well as corporations will be completely liable.
The Government sometimes have good intentions. We all supported on a cross-party basis the idea that if a company is prosecuted for tax avoidance, it should not then get a public contract. We all supported that in this House, but now, two years since it was introduced, not a single tax dodging entity, despite judgments by tax tribunals, has been barred from securing public contracts. What frustrates most of us in all parts of the House is precisely this non-implementation of legislation which we think could be effective and which we have all supported.
Another issue also came up. We supported the Government’s introduction of the general anti-abuse rule. We had been campaigning for years on it, and it came into effect on 1 July 2013. The Chancellor has referred to it on several occasions in various debates. The concept is good, but HMRC cannot go after offenders on its own because the Government have, in effect, put the tax avoiders in charge. HMRC needs permission from a panel, populated by the corporate tax avoiders, before it can implement the GAAR. The panel includes, for example, a partner from Baker Tilly, a firm of accountants associated with a tax-avoidance scheme used by Aberdeen Asset Management to dodge taxes on bonuses to employees, and so far the panel has not looked at a single case. It renders debates and legislative measures in this House totally irrelevant to the real world. The real issue is that no matter how many policy statements, reports and legislation we have, it is all rendered pointless if HMRC does not have the staff and resources to implement them.
I was critical of my own Government; I opposed the staffing cuts at HMRC then. In 2005, there were 92,000 staff at HMRC. By 2015, there were 62,000 and by next year there will be a planned 52,000. That is a 43% cut in the very tax collectors we rely on to chase the evaders and avoiders. For every pound spent on a member of staff at HMRC, £25 is brought back. That is not my figure, but the independent assessment. The Government have now closed all 281 local tax inquiry offices. They have brought in a centralised call system, which is struggling on every measure. HMRC’s management have gained a reputation across the civil service for belligerent incompetence, and that was displayed when the Public Accounts Committee attempted to hold them to account. Morale in HMRC is at an all-time low, which is testified to by the Government’s staff survey showing that it had the lowest level of employee engagement across all Government departments.
We have also seen, as a result of the leaked memos of four weeks ago, the HMRC management’s union-busting strategy. They have not only targeted and victimised PCS reps, but are trying to set up an alternative staff association
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to break the PCS. In my view, HMRC is not only not fit for purpose, but sinking. It is in need of basic reform if it is to live up to the expectations placed on it even by the report that the Treasury published yesterday. If we are really going to tackle tax avoidance and evasion and have any hope of closing the tax gap, we need a more effective, better staffed and better resourced HMRC. We need greater parliamentary accountability, which means: a specific Minister responsible for HMRC; and a separately established Select Committee to which it is accountable. We also need resources for organisations outside Government that can monitor it and respond to the detailed, complex Government consultations. Above all else, HMRC needs staff resourcing and the reversal of the staffing cuts on this scale that have neutered its operations. If we really want to tackle the tax gap, we need to ensure that it is properly staffed, that Parliament is in control and that there is proper accountability and monitoring throughout. In that way, we can tackle the tax gap, and we can start talking about the fairness of the wealth tax, the financial transaction tax and corporate tax reform. We need not so much a long-term economic plan as a long-term fair tax plan.
1.31 pm
Sir Andrew Stunell (Hazel Grove) (LD): It is a privilege and a pleasure to take part in this debate. May I also say that it is a pleasure to follow the preceding speaker? The hon. Member for Hayes and Harlington (John McDonnell) has a renowned and loud voice, and sticks up not only for his constituents but for the rights and privileges of workers in the tax collection industry.
I am speaking in this Budget debate because I believe that the United Kingdom has made encouraging progress in recovering from the decade of boom and bust that preceded May 2010. It has often been painful, but we have made many of the necessary repairs to our economy. We should reflect that back in May 2010 the country was borrowing £428 million every day of the year just to plug the gap between the income to and the expenditure from the public accounts. Five years on, we have a record number of people in employment—in skilled employment, as we were reminded yesterday. Jobs growth has been highest in the north-west, and I am happy to report that unemployment in my constituency is lower than it has been for many a long year.
We have recruited a record number of apprentices. It is worth reflecting on some of the dire predictions made at the time of the Chancellor’s first Budget about the rise in unemployment that we could expect and the damage that would be done to young people and their prospects by the coalition Government’s policies—in fact, we have a record number of apprentices. I am proud of my constituency’s record in recruiting apprentices and reducing unemployment for young people. I should add that a record number of young people—including young people from deprived backgrounds—are now going to higher education.
We have raised the state pension and put in place the triple lock to protect it for the future, and we have provided the pupil premium. I was looking back at my maiden speech, having it in mind that this might well be my final speech, and noticed that I commented then on the need to get more funding for schools in Stockport.
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Now, with the pupil premium, we do see that help for those pupils who need it most in the Stockport school system.
We have raised the tax threshold and taken many low-paid people, particularly part-time women employees, out of the tax system altogether. The standard rate tax threshold is now at a level that not just reaches the Liberal Democrat manifesto promise of the last election but exceeds it. I remind the House that, in the run-up to that election, the Prime Minister said that, although it was a nice idea, it was quite unrealistic, so I am extremely proud and pleased to see that measure in place and the Chancellor taking it a little bit further in his announcement the day before yesterday. I am slightly less pleased to see the Chancellor and the Prime Minister campaigning around the country on the grounds that it was a Conservative policy in the first place, which it most emphatically was not.
I am pleased to see the rise in the minimum wage, which is to take effect in the autumn of this year. I am also pleased that, over the period of this Parliament, we have seen the wealthy pay more tax. Another step towards that is the reduction in the pension pot limit, which was announced this week. We see the wealthiest in society paying the most, which of course should be the case, but, more to the point, they are paying a bigger share than they were in 2010. We are also seeing the equality gap closing to the benefit of those who are least well off in society.
Let me comment briefly on one or two Budget announcements tucked away at the back of the Red Book on page 100. I am particularly pleased to see money being put into tackling the abuse of nuisance calls. As an active member of the all-party group on nuisance calls, ably led by my hon. Friend the Member for Edinburgh West (Mike Crockart), I was delighted to see such a measure, and I know that that will be the case for many of my constituents too.
I wish to comment on the expansion of the church roof repair fund. When the fund was initially announced, I wrote to churches and church organisations in my constituency, more in hope than expectation, and was delighted to get the response I did from them. I know that it was oversubscribed even in my own constituency, so to see that being taken further is very welcome news.
Let me focus a little on infrastructure spending, particularly housing. I wish to agree with the many speakers who have said that the volume of house building is important. I have already noted the fact that we have restored and increased the number of social and affordable homes for people, with the 4 millionth such home being opened in my constituency some 12 months ago. It is a question not just of volume but of quality. I was pleased to have been the Minister who signed off a 25% increase in energy performance standards required of new homes. I commend my successor, my hon. Friend the Member for Bristol West (Stephen Williams), for going a step further this year and for pushing forward towards zero-carbon homes, but there is still more to do.
I am pleased with the steps that are being taken on transport. The northern transport strategy and the proposals related to that are certainly very good news. The money being invested in the northern hub and, even more importantly, in the abolition of the dire Pacer trains is thoroughly welcome as well. We are looking forward to
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the outcome of the rail franchising, which is currently going on, to see further advances and improvements in rail travel in my Hazel Grove constituency.
I want to draw attention to two events that have taken place this month, which show powerfully how the coalition is delivering on its infrastructure promises. The first of those is the ceremony I attended for the turf cutting of the first phase of the A555 Hazel Grove bypass. That project was shown as a dotted line on A to Zs published in the 1960s. It is something else about which I spoke in my maiden speech and so it is a great pleasure to tell the House that we have now cut the ground, that the diggers are starting and that the road is coming.
I am also very pleased by a second event. Yesterday, the Chief Secretary to the Treasury announced that a grant of £350,000 has been made available for the feasibility study for the next phase of the same road. I very much hope that that will be the first step towards relieving significant pollution, congestion and health damage to my constituents.
In his Budget statement, the Chancellor described the restoration of the UK’s finances as an unfinished task. I strongly agree with that judgment and with the Chief Secretary to the Treasury, who told the House yesterday that the task of repair will be completed in 2018 and that we must then use the growth in our economy to support vital public services such as the NHS and the police. I also support what the Secretary of State for Business, Innovation and Skills said yesterday about the importance of promoting growth in key sectors of our economy and I give credit to him for the work he has done in ensuring that those key sectors received strong coalition support as well as on promoting exports and supporting small and medium-sized enterprises.
That brings me briefly to the banking system. I am concerned that we have not yet dealt with the problem of access to finance for small businesses and I regard that as unfinished business for the future.
I guess that every Member of Parliament chalks up not just successes but one or two regrets. I shall keep most of those to myself, but I want to mention one that will, I hope, reach the ears of the House authorities, and that is the utter failure of this place to provide effective hearing loops for those of us with hearing aids. This is a long-running battle of mine and I am in contention with the Administration Committee. I have spoken to all sorts of people within the House and it seems to be beyond the wit of technology or ingenuity to find a system that is effective for those of us with a hearing disability. In particular, I want to mention that that affects my constituents when they come here. My constituency is some 180 miles away and people come perhaps once in a lifetime to a meeting in this place and for them to be stuck at the back of the room where they cannot hear a word is discourteous to them and entirely improper for this House.
Nobody can do this job without help and support from elsewhere. I have done this job with enthusiasm and energy for 18 years only because I have had the active support of my wife Gillian.
Madam Deputy Speaker (Dame Dawn Primarolo):
Order. We have three speakers and I am very keen that we should get everyone in, but we must get to the
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wind-ups before 10 past 2. I am very sorry, but may I ask each speaker to consider using eight minutes rather than 10?
1.43 pm
Mr David Anderson (Blaydon) (Lab): Thank you, Madam Deputy Speaker. Having sat here for the past four hours, I will try my best to do as you say. In passing, may I wish you all the best for your future as well as your partner, who is a very good friend of mine from way back?
Nothing epitomises this callous Government more than what we saw on Wednesday at Prime Minister’s Question Time, when the Prime Minister, as usual, tried to make a joke out of it and said that the leader of my party:
“does not know where his next meal is coming from”.—[Official Report, 18 March 2015; Vol. 594, c. 755.]
The sad reality in this country is that far too many of our citizens do not know where their next meal is coming from, but 2 million do—it is coming from the food banks. What an absolute disgrace. What a record of failure. It is those people who will again face the brunt of Tory policy—whether in trying to find out the £12 billion of secret welfare cuts or the £13 billion of secret public sector cuts, neither of which have been spelled out in the past three days of the Budget debate. So can we trust the Chancellor going forward? He has failed miserably up to now.
May I add, Madam Deputy Speaker, that I do not have any problem with hearing, but I do have a problem when people talk during my speech, as the right hon. Member for Hazel Grove (Sir Andrew Stunell) is doing now.
Let us have a look at this Chancellor’s record. This week we had a report from the King’s Fund. The NHS has supposedly had its budget protected, if we are to believe what the Government said, and yet the number of cancelled operations is up by a third. Ambulance response times are going backwards; all three national targets have been missed this year. Sixty out of 83 foundation trusts are in deficit.
In A and E, in December 2014, 414,000 people waited longer than four hours—a 47% increase on the previous quarter. In December, 42,000 people waited on trolleys—a 124% increase since 2013. Sixty-six foundation trusts missed the target for A and E waiting times—double the number in 2013. The percentage of people waiting longer than 18 weeks for treatment was up from 2.5 million in 2010 to 3.2 million in 2014. In the last year alone, there has been a 30% increase in people waiting longer than 18 weeks for treatment. In this country, 12.5% of patients are waiting longer than 18 weeks—the worst ever recorded level.
For cancer, there is a 62-day target for people to be treated. Although the target was met in 86.7% of cases in April 2010, it was met in only 83.5% of cases in October 2014. In December 2014, 31 trusts missed the target—double the number in the middle of last year. In adult social care, because of 12% cuts across council care budgets we have seen a 25% reduction in the numbers receiving community care services. That obviously has a huge knock-on effect on the capacity of the NHS.
Another public service hit by this Government—another public service struggling—is the police service. The Metropolitan police have 1,748 fewer police officers
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than in 2010. Over half a million rest days were owed in one year. That means that every week in this city, 1,000 policemen are working shifts for which they are not getting paid. In addition, 43% of officers say they are suffering from stress-related illnesses. Case loads are described as unmanageable. More people than ever are living in this city—nearly 9 million more people—and £1.5 billion less is being spent on them. That is the legacy of this Government.
The Prison Service is in disarray. This week, the Prison Officers Association responded to the news that its members would not be getting a pay rise by saying that in the past year there have been 4,000 assaults on prison staff; a 40% increase in serious assaults; an overcrowded prison system, with a prison population at record levels; 3,500 fewer officers to the year ending 2014; a service that is finding it difficult to recruit and retain; staff forced away from their homes and families because they are being put on detached duty to make up for lost staff; and motivation and morale at an all-time low. It is no wonder, because the service is failing to meet every recognised health and safety requirement.
I received a letter from a constituent, Craig Robson, who is a prison officer. This is what he said to me:
“Dear Dave,
As you can see, one of your constituents who was”
“a proud Crown servant is”
“being treated as a second class citizen”
“a pay rise of 0%. I will give you some history. The last 5 years have been”
“0%, 0%, £100, 1%, 0%.”
These are supposed to be pay rises.
“Am I happy? No, but to add insult to injury I was looking at a pay note from”
September 2011 and comparing that pay note with the one I received this month.
“I am now £109.41 worse off”—
£27 a week worse off. When the Tories deny the claims that we make regularly that people are £1,600 a year worse off, they might be right, because that gentleman is a lot more than £1,600 worse off, and that takes no account of inflation. He goes on to say:
“The prime minister stated not two weeks ago that he thought everyone should have a pay rise. What happened to loyal servants who were in hand to hand combat”
in jails every day up and down this country?
What we have seen is a record of failure: every target missed; a record of pain for those who are least able to handle it; and a record of spin and deceit from the Tory party. Gull manure was talked about earlier. It is not gull manure that we are getting from this Budget; it is bull manure—left, right and centre—and there is a promise of more to come. The Tories promise more pain for those who are on welfare, more cuts for our essential services and more bungs for their friends, whether MPs in marginal seats or their friends in the
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City. They are failure personified, and this country will have a chance in seven weeks’ time to hold them to account for their failure and for the way in which they have led this country astray.
1.50 pm
Laura Sandys (South Thanet) (Con): It is pleasure, although with a significant amount of disagreement, to follow the hon. Member for Blaydon (Mr Anderson). We must remember exactly where we have come from, not just where we are today. We inherited a total economic mess, and as with school reports, it is not just the overall score card that matters; it is the difference between the starting point and where we are today: unemployment from 8% in 2010 to 5.7% now; the deficit halved; and growth up to 2.5% this year, compared with a contraction of 5.2% in 2009. This is real progress, with some tangible outcomes for my constituents in Thanet.
I should like to plagiarise the Chancellor and say that, although I agree with him about the comeback country, with his help over the past five years, we have also been able to achieve the comeback constituency. His help specifically has been instrumental. He, my right hon. Friend the Member for Havant (Mr Willetts) and the leader of Kent county council were instrumental in helping us to deal with a major crisis in my constituency after the announcement that Pfizer was going to pull out of Sandwich. What did the action Chancellor and the action Prime Minister do? Within hours, we had a taskforce, driving through and delivering an enterprise zone, £40 million for small and medium-sized enterprises in east Kent and important upgrades of the rail service. Today, people from Sandwich can get to London in an hour and a half. Getting from Ramsgate to London will take just over an hour in the near future. SMEs across the constituency have interest-free loans and businesses are going from strength to strength.
Although I am extremely sad to leave and really love my constituency, I am pleased that my departure has further supported the local economy, with half the lobby spending a lot of time in the pubs in my constituency, desperately seeking Nigel and hunting down the Pub Landlord. I am pleased that my departure has offered the bars, restaurants and hotels such roaring business. At least, they will all welcome the 1p off beer and a reduction in the price of Scotch whisky.
Helping the people of South Thanet is something that I have been privileged to do. I love the attitude of the residents of Ramsgate, the pride of those in Broadstairs, the edginess of everyone from Cliftonville—they know exactly what I mean by that—and of course the charm and beauty of Sandwich and my villages. I hope that we might be able to demonstrate that we have made a difference in the past five years and that they will benefit in the future from a Conservative Member of Parliament and a Conservative Government, securing the progress that we have already made.
We have had a significant fall in jobseekers from 6.4% to 4.3%. We have the most successful and vibrant enterprise zone in the country. The Chancellor announced in the Budget that we would have a further extension of the enterprise zone in Sandwich, and we have secured £20 million to fund flood defences for Sandwich as well.
Of course, I would never have been able to make anything happen without my fabulous team, because nobody in this place works on their own; it is an individual
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business and an individual career, but with a huge amount of commitment from the people around us. I would like to thank them for that.
It is also the people in this House, friends and colleagues on both sides, who have contributed so much to my respect for this place and my ongoing commitment to raising its profile and ensuring that it has a better reputation among those outside. I will definitely be working with many Members in future, both those who are retiring and those who are returning. While I have been here I have been called Mrs Rubbish because of my interest in waste resource, and hopefully I have also raised the profile of epilepsy.
This is a strange place. I was christened here, so I have felt some connection with it from a very early age. But it is a place that needs to think again about what it wants and how it wants to encourage new people, new ideas and new diversity into it. It needs to think again about what makes it really special and not to be captured by the fear of change. Nostalgia is a dangerous think, because it often looks back and transposes historical references where they did not exist. Personally, I believe that we need to reduce the number of MPs and give them more fulfilling roles. Professionalism is to be aspired to, not shunned; a big ask, and there is still a long way to go.
I say this to the wonderful colleagues I have met on both sides of the House over the past five years: hold your heads up high, because no one else will. Hold the media to account by not playing the gossip column game but instead demanding that they report the serious stuff that really goes on here, because this House is occupied by some of the most honourable people I know.
I have learnt a lot about people, about politics and, most certainly, about myself. I want to thank the residents of South Thanet for giving me that privilege. Although I would like to have served longer than five years in this place, I hope that I have given my best to improve circumstances and lives across the constituency. I would like to thank the staff of the House, and I will miss those pesky little mice that run across my foot on the Terrace when I have breakfast in the morning.
1.57 pm
Sir Edward Leigh (Gainsborough) (Con): It is a great pleasure to be the last Back Bencher to speak in this debate and to follow my hon. Friend the Member for South Thanet (Laura Sandys). Ann Treneman, the sketch writer for The Times, described her as one of the few eminently sane Members of the House. I am still looking forward to a sketch writer describing me that way—one lives in hope.
I am the last Back Bencher to speak, and I sometimes think that I am the last Thatcherite standing. I have spoken in most of the 32 Budget debates in my time in Parliament. I have some bad news for you, Madam Deputy Speaker: I hope that this is not my valedictory speech, but you at least will not have to hear me again, and that will be a great solace to you. I am standing for election again and hope that the good people of Gainsborough will re-elect me. I will be standing on the same platform on which I have stood at all the previous election. It is a pretty simple message—speaking up for a strong Budget and a well-defended country—and it is worth repeating.
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My predecessor in Gainsborough had quite a relaxed view of campaigning in the constituency. Having ridden for a couple of hours in the morning, he would return to the White Hart hotel in Lincoln for a large breakfast before pondering his sole press release of the entire campaign, which he used to deliver on a certain day to the editor of the Market Rasen Mail. At one general election—perhaps it was his last—when he went to deliver the press release the editor was out, so my predecessor, Sir Marcus Kimball, said he would come back tomorrow. When he came back the next day, the editor said, “Don’t worry about a new press release; I’ll just use the one from the previous general election.”
In a sense, times do not change, because the same themes come back again and again. I apologise if sometimes I weary the House with the same themes in these Budget debates, but they are two incredibly important ones that need emphasising again and again. The first is the need for tax simplification, and I shall say a bit about that in a moment.
The second theme is budgetary and fiscal responsibility. I said earlier that I may be the last Thatcherite left standing; in fact, I sometimes think that I am the last Gladstonian Liberal in this place. I believe that if Governments restricted themselves to avoiding foreign entanglements, or foreign wars—I have, I think, voted against every single one that has come up during my time in Parliament—and attempting to balance the budget, that would do more for human happiness than virtually anything else they could do. Balancing the budget is the first duty of government. It has to be said again and again that we are still borrowing £93 billion every year.
After five years of austerity from this Government that has been roundly criticised by Labour Members, we are still spending £93 billion more than we earn every year. When we came to power, the figure was £141 billion a year. That was completely unsustainable five years ago, and it is still unsustainable. The national debt stands at a staggering £1.5 trillion. One can criticise the present Government, but at least, without getting involved in clichés, they have a long-term economic plan to try to ensure that by next year, or the year after, that massive debt as a proportion of GDP at last starts to decline in cash terms by the end of the next Parliament.
These are not just figures. This is a matter of desperate importance to everybody in the country. Debt on that scale is simply unsustainable, and any incoming Government —I say this to my Labour friends—must have some sort of plan for dealing with it. Yesterday I intervened on the shadow Chancellor, who gave a good, knockabout speech. He portrayed himself as a minor Shakespearean poet and it was all quite good fun. It was extraordinary, however, that he spent very little time outlining how he was going to reduce the deficit. Perhaps we have been too complacent in making these arguments to the British public. When we argue that we have halved the deficit, perhaps some members of the public say, “Well, problem solved. If our debt is halved, does that mean we’ve already arrived at the end?” No, it does not—it means that we were borrowing £141 billion a year and we are now borrowing £93 billion a year. Perhaps this has given the Labour party an opportunity to relax the public mood on deficit reduction.
What are the plans of the Labour Opposition to reduce the deficit as they prepare, they hope, for government? When we questioned the shadow Chancellor yesterday,
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he said he was going to prevent more free schools opening, abolish police and crime commissioners, and try to get more efficiency savings in the NHS. Is that really a plan that holds water? Can we really believe that it will solve the problem that I have been emphasising in the past few minutes? I do not think so. Labour Members are very proud of the fact that they dramatically increased spending on the national health service and on education, but the problem with dramatically increasing spending on the national health service was that they dramatically reduced productivity in the national health service. There is nothing to suggest that if one increases spending on the NHS by more, roughly, than the real rate of inflation, one will avoid, once again a massive reduction in productivity.
The Labour party must ask itself this question: how it is going to balance the books? I believe that, fundamentally, it is the central economic questions that decide general elections. I do not think that they are decided solely on the basis of what has been said during the latest television debate on television. What is important is how much confidence the public have in those who are charged with the public finances. I know that we are about to hear a speech from the shadow Treasury spokesman, but so far I have waited in vain for proof that the Labour Opposition are ready for government, and ready to deal with the budget deficit.
I have said enough about that subject, but I think it is one to which we must continually return. If we are fortunate enough to be re-elected in 47 days’ time, we must not let up for a moment. However unpopular and difficult it is and whatever the pressures, we must sustain our absolute determination to start reducing the total national debt, in cash terms, by the end of the next Parliament.
I suspect—although no one quite knows—that if the Labour party is to fulfil its proper and understandable ambition to spend more on education or the national health service, it may have to borrow an additional amount of up to £30 billion a year. In good times, that is sustainable, but what happens if there is another downturn? What happens if the cost of borrowing rises, as it inevitably will? It will all have to be paid for. That is the central argument of the campaign, and the Labour party must deal with it.
Let me now say a little about tax simplification. I know that it is hard when there has been a recession; I know that the Chancellor has had to struggle with the difficult campaign to attempt to start reducing the deficit; I know that every type of tax simplification is extraordinarily costly, in both monetary and political terms; and I understand the difficulties that the Chancellor had three years ago when he tried to simplify VAT. I know all those things. Nevertheless, tax simplification, along with a flattening of the system, is right in the context of entrepreneurship and efficiency. It may not be politically apparent every year—Chancellors obviously want to present popular Budgets—but in terms of financial orthodoxy and the right way to manage the Government’s finances, tax simplification makes sense.
We have already been given a bit of tax simplification. We are to see the end of the tax return, the creation of online tax accounts, a new personal savings allowance, and the phasing out of class 2 national insurance
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contributions for self-employed people. They are all good steps, but they are only the first steps. I hope that, if the Chancellor is fortunate enough to be back in his job in 50 days’ time—and I pray that he will be, for the reasons that I gave earlier—he will make not just dealing with the public finances but simplifying taxes his guiding light for the next Parliament. We still have one of the longest tax codes in the world; I believe that it is the longest after India’s.
Labour portrays itself, quite rightly—why shouldn’t it?—as the party of the labourers, but it does not help the people who labour for profitable companies if we increase taxes on those companies, because that puts pressure on them to reduce the number of people they employ. What I have been talking about today is not some airy-fairy, ideological point that has been made just for the sake of it, but an attempt to help ordinary hard-working people in jobs, to help those people to keep their jobs, to make companies profitable, and to enable the country to have confidence in itself. That is why I shall be proud to be standing as a Conservative Member in 47 days’ time, and why I shall be praying that my right hon. Friend is back in his job as Chancellor of the Exchequer.
2.9 pm
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I want to put on the record my acknowledgment for all their years of service to their constituents of the right hon. Member for Bexhill and Battle (Gregory Barker), the hon. Member for South Suffolk (Mr Yeo), the right hon. Members for Havant (Mr Willetts), for Somerton and Frome (Mr Heath) and for Uxbridge and South Ruislip (Sir John Randall), the hon. Member for Bury St Edmunds (Mr Ruffley), the right hon. Members for Banbury (Sir Tony Baldry), for South East Cambridgeshire (Sir James Paice) and for Hazel Grove (Sir Andrew Stunell), and the hon. Member for South Thanet (Laura Sandys).
John McDonnell: I apologise for intervening, but in my enthusiasm to attack the Government I failed to refer to the retirement of the right hon. Member for Uxbridge and South Ruislip (Sir John Randall), who has been an absolutely sterling colleague for me in Hillingdon and has served his constituents so well.
Luciana Berger: I thank my hon. Friend for his intervention. We have heard some wonderful valedictory speeches, and I wish all those right hon. and hon. Members well in their future endeavours.
We also heard some very impassioned speeches from my hon. Friends. My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) told us about unemployment in the north-east, and said that there was more of a northern outhouse than a northern powerhouse. My hon. Friend the Member for Croydon North (Mr Reed) spoke about his local hospital having to declare a major incident, and about how the Budget has done nothing for the NHS. My hon. Friend the Member for Luton South (Gavin Shuker) helpfully shared with the House excerpts from the 2010 Red Book. We should all remember his point that the Chancellor’s actions during the past five years have been worse than doing nothing at all.
My hon. Friend the Member for Blaenau Gwent (Nick Smith) talked about the proliferation of food banks and charity shops, which have increased in number
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in his constituency since this Tory-led Government came to power. My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) talked about the north-east, rising inequality and the deep and growing divide between the north and the south. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) raised serious concerns about funding for health, which I will come on to, and the devastating cut of 24% in further education announced this week.
My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) talked about the impact of stagnant wages and particularly about the poverty that affects her constituency more than any other part of the country. That was echoed by my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) in relation to the challenges faced by her constituents in making ends meet, and with her very moving stories about overcrowding and the effects of the bedroom tax and escalating rents. My hon. Friend the Member for Hayes and Harlington (John McDonnell) rightly talked about HMRC’s lack of action in tackling tax avoidance and evasion properly, and the 43% cut in the number of people working for it. My hon. Friend the Member for Blaydon (Mr Anderson) spoke about the cuts to social care, and particularly the cuts to prison staff that have led to a very serious increase in the number of assaults.
I have to say that I found the Chancellor’s Budget speech curious. There were parts I could agree with, such as the devolution of business rates, although it is not clear why he stopped at Cambridge and Greater Manchester; there were parts that were audacious in the extreme, such as his recollection of his deficit reduction plan in 2010; and there were parts that made me wonder whether he and I inhabit the same country.
I was struck by the Chancellor’s assertion that households will be on average £900 better off compared with 2010, and that they will be more secure. It is almost as though he thinks that the very fact that he has decreed it means that it will be so. Should that fail to become the reality, he had a very handy new measure of living standards to fall back on. It is a flawed measure, because it includes income to universities and charities, but it is a measure all the same. Sadly for him—more sadly for families struggling to keep their heads above water—even his new cunningly crafted measure shows that living standards in the first quarter of 2015 have gone down, not up, compared with the first quarter of 2010.
That Budget measure and other more sensible ones demonstrate what we know to be true: it is harder now to make ends meet. Household incomes are down compared with 2010, as the IFS confirmed two weeks ago, and wages after inflation are down by more than £1,600 a year since 2010. I know that to be true because people tell me it all the time in my advice surgeries, in their e-mails and on the doorstep. The Chancellor may have decreed it, but, sadly, he has not made it so.
The welcome growth that we are finally witnessing in the UK economy has been a long time coming. With our economy still vulnerable, we warned in 2010 that the Chancellor’s decision to accelerate tax rises and spending cuts would hit confidence and choke off our economic recovery, and so it has proved. We have had the slowest recovery for 100 years. Growth is still lower than was forecast in 2010, and it is set to be slower this year and next year than it was last year. Productivity is down—UK output per hour has fallen to 17% below
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the rest of the G7, the largest gap since 1991—but the Chancellor did not once mention the word “productivity” during his speech. For working people, we have an economy in which too many workers suffer low pay or, worse, are on contracts with no guarantee of being paid at all.
Our economy may be growing, but it remains too unproductive, unbalanced and insecure. We needed a Budget that addressed those issues, and that established a proper British investment bank for small and medium-sized businesses and an independent national infrastructure commission, which would lead to a properly co-ordinated industrial strategy. The uplift on business rates awarded to Greater Manchester and Cambridge is welcome—it was Labour’s policy, after all—but why has the Chancellor stopped there? Why has he not gone further? Our plan is for more extensive devolution—£30 billion-worth—and for it to be countrywide, whether people choose to have an elected mayor or not. Every part of the country will benefit from Labour’s plans. For prosperity to be shared, it must be felt by the many, not the few.
The Tories seem hellbent on decimating the services relied on by the many. The NHS, also conspicuously absent from the Chancellor’s speech and already under real strain, will be an inevitable victim of his colossal programme of cuts. Be under no illusion: page 130 of the Office for Budget Responsibility’s “Economic and fiscal outlook” makes it clear that the Chancellor’s proposed spending cuts for the next three years will be deeper than those that have been made in the past five years. Massive cuts will be made to policing, local government and defence budgets. In the end, those Departments will not be able to deliver the scale of cuts required, and the axe will inevitably fall on the health service.
Our NHS is in no fit state for a white-knuckle ride. Already, more than half of nurses say that their ward is dangerously understaffed. Waiting lists are at their highest for six years, and one in four people are waiting a week or more to see their GP. In the past 12 months, more than 1 million people have waited more than four hours in A and E. The Tory care cuts of more than £3 billion have been the root cause of the A and E crisis during this Parliament. If they are allowed to do the same in the next Parliament, it will entrench the crisis, not only in A and E, but across the whole NHS.
A Labour plan and Budget would look different. Our plan will deliver a rise in living standards for the many and the stronger growth that we need. It is a fairer plan. We will reverse the tax cut for millionaires, introduce a mansion tax to fund the NHS and abolish the bedroom tax. We will build a truly national recovery, stop exploitative zero-hours contracts, raise the minimum wage and cut tuition fees to £6,000. Labour has a plan to build at least 200,000 homes a year by 2020, creating up to 230,000 construction jobs. Our plan will restore the link between the prosperity of the nation and the prosperity of the individual, protect the NHS and get the deficit down. In our plan, when the country succeeds and grows, its people will too.
2.17 pm
The Exchequer Secretary to the Treasury (Priti Patel):
I pay tribute to all right hon. and hon. Friends and Members who have spoken in this debate. Some of
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them have spoken for the last time, and we should note their distinguished service. Their contributions will be missed in the next Parliament. I will particularly miss their wisdom and guidance
This is a Budget that rewards hard work, cuts taxes for millions of people and empowers families and businesses. It gives people more incentives to save and greater choice over how they spend their savings and pensions. It is a Budget based on a long-term economic plan that is working. It is a plan that is growing our economy and providing a better future for our country; that has given more people the chance to get on in life, with record numbers of people in employment; and that is providing more security for the long term, with the deficit down and our national debt starting to fall as a share of the economy.
Five years ago, our economy had suffered a collapse greater than that seen in almost any other country. Today, alongside jobs, growth, new business start-ups, new housing zones, enterprise zones, support for savers and for people who aspire to own their own homes, we have lower inequality, child poverty down, pensioner poverty down to record lows, the gender pay gap smaller than ever, and the number of students from disadvantaged backgrounds at university at a record high. The stability that we have put in place has taken Britain from austerity to prosperity.
Listening to the contributions of Opposition Members, I was struck by their complaining that the economic recovery is not taking place fast enough in their eyes. I have heard their message, but it was they who crashed the British economy. It was on their watch that the debt-fuelled economy was created, that manufacturing halved as a share of the national economy and that the gaps between the north and south and between the rich and the poor grew ever larger. Yet their complaint is consistent: the Government are not fixing their appalling legacy fast enough.
This afternoon, we have heard, from constituency to constituency—from Newcastle upon Tyne East to Croydon North to Blaenau Gwent to Luton South to Islington South and Finsbury to Poplar and Limehouse—from Labour Members who have opposed every single measure undertaken by this Government to put us back on the path to recovery. Let me respond to some of the points that have been made in this wide-ranging debate.
Housing came up consistently. Since 2010, more than 200,000 affordable homes have been delivered. Council house building starts are at their highest level in 23 years. In the year to December 2014, 250,000 new homes were granted planning permission. In London alone, £1.1 billion has been provided to the Greater London authority to deliver affordable housing zones. Labour Members may complain, but their complaints are actually a demonstration of the failure of Labour local authorities to deliver housing.
Priti Patel: Actually, it is not nonsense. It is a failure on the part of Labour.
Emily Thornberry:
Will the hon. Lady tell us how many affordable homes the Mayor of London has built in Islington? I do not mean homes at 80% of market
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rent; I mean truly affordable homes that have been built by the Mayor of London in Islington. If she has that figure, she will realise that what she has been saying is nonsense.
Priti Patel: I will correct the hon. Lady. It is not nonsense. The money has gone to the Greater London authority to deliver affordable new homes. She said that the Help to Buy ISA would not help her constituents. It is projected to help 190,000 people in London buy their first home over the next five years. Of course, the average first-time buyer is a basic rate taxpayer.
We have heard complaints that the North East combined authority is not doing enough. Let us be clear: more people are employed in the north-east then ever before. We have heard about Croydon. There has been £7 million of funding in Croydon and the GLA is delivering 4,000 new homes and 10,000 new jobs. Those are positive and proactive measures that are transforming people’s lives.
When it comes to job creation and job growth—
Mr Anderson: Will the Minister give way?
Priti Patel: The hon. Gentleman will recognise that I do not have time to give way.
In every single region of the United Kingdom, unemployment has fallen over the past year. We should put to bed the desperate myth of the Labour party that the new jobs are somehow second-tier jobs. That is an insult to the British public. Some 80% of the jobs are full time and 80% of them are in skilled occupations. Each and every one of them represents one more person standing on their own two feet. The Budget delivers for every single region of our great nation, whether it is by helping manufacturing in the midlands, connecting the south-west or growing the economy.
I would like to pay tribute to a number of Government Members. My right hon. Friend the Member for Bexhill and Battle (Gregory Barker), my hon. Friend the Member for South Suffolk (Mr Yeo), my right hon. Friends the Members for Somerton and Frome (Mr Heath), for Havant (Mr Willetts) and for Uxbridge and South Ruislip (Sir John Randall), my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), my right hon. Friends the Members for Banbury (Sir Tony Baldry) and for South East Cambridgeshire (Sir James Paice) and my hon. Friend the Member for South Thanet (Laura Sandys) are all distinguished Members who have made substantial contributions to the House and to this afternoon’s debate. They covered some of the key Budget points that affect their constituencies. They drew on their expertise from their time in the House or from their time as Ministers to speak in detail about infrastructure, energy, jobs, education and higher education.
My right hon. and hon. Friends also spoke about the prudent financial management that this Government have introduced through our long-term economic plan. It is this Government who have set out long-term economic plans for every region in the United Kingdom. It is this Government who are committed to investing in the whole of the United Kingdom. It is this Government whose long-term infrastructure plan is connecting our regions.
My hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned the housing growth and infrastructure growth in his constituency. I will come back to him on the personal pension allowance,
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which he asked me to do. We are allowing the local leaders in our communities to make the key growth-delivering decisions in their areas, rather than making top-down decisions from the centre. We are recovering from the worst recession since the second world war. We are turning the country’s finances around, improving the lives of hard-working families, and putting more of people’s hard-earned cash back into their pockets where it belongs. We are increasing living standards, with real household disposable income revised up to increase by 3.7% this year, and to keep on rising—
[
Interruption.
]
As ever, the Labour party sneers when it comes to discussing living standards and household incomes. [Labour Members: “What?”] Well, let us be clear: the best way to improve living standards is to get people back into work and boost productivity and growth. This Government have delivered the highest levels of employment ever. Unemployment is down to 1975 levels—it has fallen at its fastest and was down by just under 500,000 in the year to December 2014. We are putting Britain back on its feet, and this Budget marks a step in delivering prosperity to all corners of our country.
The choice our country faces is between returning to the economic chaos that Labour Members were part of under the previous Government, or sticking to the long- term economic plan that will deliver for the constituents of the hon. Member for Islington South and Finsbury (Emily Thornberry) and every Member of this House. In this Budget we choose the future and are taking another big step on the road to a stronger economy.
As I close this debate I thank all hon. Members for their contributions this afternoon, and in particular I send—[Interruption.] I hoped for a degree of courtesy and civility at this point. I send my best wishes to all right hon. and right hon. Members who have made
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their last contributions in the Chamber today. I thank you, Madam Deputy Speaker, for your time overseeing debates and the civil way you have handled them, and I commend the Budget to the House.
Ordered, That the debate be now adjourned.—(Greg Hands.)
Debate to be resumed Monday 23 March.
Petition
Body Image Altering Software
2.27 pm
Chi Onwurah (Newcastle upon Tyne Central) (Lab): I rise to present a petition on behalf of pupils at Dame Allan’s school in Newcastle. The petition was organised by pupils at the school who feel that the use of Photoshop and similar image software to alter photos of people in magazines, newspapers and the internet is having a negative effect on the self-esteem of young people. A similar petition was signed by more than 150 people.
The Humble Petition of the organising group of the pupils of Dame Allan’s School, namely Diane Rasul, Ria Barber, Virginia Barbour and Amarah Latif.
Sheweth that the Petitioners are campaigning to abolish the use of Photoshop and other image altering software programs from use on images of people.
Wherefore your Petitioners pray that your Honourable House will urge the Government to actively encourage regulators to put an end to the use of these programs which enable the spread of an unrealistic body image.
And your Petitioners, as in duty bound, will ever pray, &c. [P001464]
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Inward Investment: Southend
Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)
2.28 pm
Sir David Amess (Southend West) (Con): I am grateful for the opportunity to share with the Minister a few issues concerning the constituency represented by me and my hon. Friend the Member for Rochford and Southend East (James Duddridge). My hon. Friend has had one or two health problems recently, and is only half the man he was, but I am delighted to tell the House that he is now well on the road to recovery and is active in the constituency again. I am delighted to have him by my side today. Ministers are not able to take part in such debates from the Back Benches, but I have discussed with my hon. Friend the issues I wish to raise. He has given me full permission to speak for the end of the town that he represents.
Southend West—I have to be parochial first—has a population of 89,150 people. I am delighted to tell the House that since May 2010 there has been a 53% reduction in unemployment. It is absolutely incredible, when I think of the days I used to represent Basildon and how high unemployment was then, to have that reduction in just five years. I am also delighted to tell the House that youth unemployment has fallen by exactly the same amount, 53%. We have 3,065 businesses in Southend West, which is 310 more than we had in 2010. Interestingly, the median gross weekly pay is £560 a week, which is £40 more than in the rest of the United Kingdom.
One reason why I go on about how wonderful Southend is as a seaside resort—it is not just the best in the country, but the world—is the fact that in the past year more than 6 million tourists have visited the town, which is absolutely incredible.
I am delighted that the Minister visited Southend and oversaw the signing of the city deal. In those days, we had a Conservative-controlled council. Last year, the Conservatives lost control and were reduced to just 19 councillors. My understanding is that all the other parties have joined forces to vote against the Conservatives. There are nine Labour councillors, 13 independents—three in my constituency and 10 in the constituency represented by my hon. Friend the Member for Rochford and Southend East—five Liberals and five UK Independence party councillors. As far as the five UKIP councillors are concerned, I am somewhat confused. As I understand it, four of them have been expelled and no longer take the whip. Whether there is one or five, who knows? Whatever party banner they stand under, I am told they vote against the Conservatives.
I am, I have to say, actually rather glad that we had this coalition Government. Those who know me will recall that I was dead against my party going into coalition with the Liberals in 2010, just as I was dead against having a fixed-term Parliament. I have always thought the Liberals are much closer to the Labour party, so I am very pleased that in Southend they have found their natural home, with their five councillors now in coalition with all the other parties. To be fair to the new council, it has only been in control for a number of months, so it is very difficult for anyone to judge them on the tangible things they have achieved. I did
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just glance at headlines in a local newspaper that stated that the council had put council tax up by 1.95%, put up car parking charges and removed 55 litter bins, but I am sure it must have done some good things as well, and perhaps there are reasons for that.
I want to refresh the House on what investment we have managed to get from the Government thus far, but I warn my right hon. Friend the Minister that I am going to ask for further help. I do realise there is only a week to go, but a day in politics is a long time, so I am quite optimistic that my right hon. Friend will be standing at the Dispatch Box saying yes, yes, yes. Ahead of my right hon. Friend’s visit to Southend, he said:
“Southend has the potential to be a driving force for growth in the South East. It is a great place for businesses to locate, expand or start-up. To help achieve that potential, local business and civic leaders told us they wanted to give much better support to small and medium-sized businesses. I am delighted to be able to say ‘yes’ to that proposal which is a big boost for the economy of Southend.”
My hon. Friend the Member for Rochford and Southend East and I were at the signing in March 2014.
As a result of that deal, the town has benefited from two tranches of funding. First, Southend was able to bid into a £32 million pot of regional growth fund money being held by Lancaster university to design and deliver a range of business support programmes meeting local needs and to develop a growth hub, which is the Department for Business, Innovation and Skills’s desired conduit for providing business support delivery. This was much welcomed. The council was awarded a considerable amount of money—£1.8 million—from the fund to deliver business support and a growth hub, and I am delighted to say that the work is now under way. Three business support programmes are being delivered, along with grants, innovation vouchers, workshops and events. A team funded by the RGF and employed to undertake business engagement for the programme has delivered the grants programme. The grants, available to small and medium-sized enterprises, offer 30% of total project cost, provided that the project is creating or safeguarding jobs—the other 70% of investment must come from the private sector. I am delighted to say that to date the council grant panel has awarded 79 grants totalling £1,132,846, which is magnificent and a vital contribution to the town’s economy, creating 295 jobs, which is above the target of 192, which is brilliant, and safeguarding 330 jobs—the target was lower.
A second funding allocation of £651,000 was for capital works to convert the top two floors of the old central library building into a business incubation centre. Happily, I understand that the centre opened just this week—I saw a splash in the local paper—so the seeds that my right hon. Friend the Minister sowed, in the nicest sense, a couple of years ago have grown and prospered. That funding matched the funding the council had invested in converting the lower floors into the new home for the Beecroft art gallery, which I have visited and is absolutely magnificent. The funding was allocated on the basis that Southend enjoyed an entrepreneurial culture but also had a lot of churn, with high business start-up and closure rates. It was therefore identified that investment in affordable accommodation and business support would assist with sustainable business growth. My hon. Friend the Member for Rochford and Southend East and I have many constituents who will benefit from this opportunity.
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Southend has also received £800,000 for the continuation and roll-out of the growth hub across the South Essex local enterprise partnership. Growth deals are a new way of running the economy, for the first time bringing together housing, infrastructure and other funding into a single pot put directly in the hands of local authorities and businesses to spend the way they know best. Thanks to the £8 million grant under the growth deal, improvements made to the A127—a road that my hon. Friend and I use all the time—will help to create better access and egress to and from Southend, supporting the airport, the airport business park, the town centre and the area east of the town’s businesses. I am delighted to say that the airport business park has also received £3.2 million of funding for developments within the joint area action plan. The Secretary of State for Transport recently visited the centre, and Lord Heseltine was there at the start of the week speaking about opportunities for investors.
Southend has also benefitted from £6.7 million of funding for non-transport investment to bring forward jobs and homes in Victoria avenue, which is badly neglected and in need of restoration. A further £1 million was allocated to Southend as part of the local sustainable transport fund investment, with the Kent Elms junction and the Bell junction both requiring major upgrades to overcome two critical bottlenecks creating major difficulties for business into and out of the town. To help us with those projects, the council will be given £4.28 million for each junction—a considerable investment. To assist with infrastructure and essential maintenance work, there is £7 million-worth of grant, and for general improvements and maintenance around the town the council received funding as part of the growth deal. In total, the council will have received some £34.5 million from the Government —this coalition Government—for these infrastructure improvements.
Pinch point funding worth £170 million was announced in the 2012 autumn statement. It aims to remove bottlenecks on the local highway network that are impeding growth. This fund reflects the Government’s commitment to supporting economic growth by tackling barriers on the local highway network that may be restricting the movement of goods and people. In Southend, for improvements to the A127 and required improvements to the Tesco roundabout—completion is expected by the end of the month—the council has received a grant of £3.3 million from the Department for Transport’s local pinch point fund. I pay tribute to my hon. Friend the Member for Rochford and Southend East for lobbying hard to get a sizeable amount of that money.
Some £9 million-worth of investment has been given to refurbish Southend police station. I can tell the Minister I was there two days ago with our hon. Friend the Minister for Policing, Criminal Justice and Victims. It is wonderful to see how this tired ’60s building is going to be transformed. The police will be moving out of the old building into Westcliffe police station for about 18 months. They are going to be provided with wonderful accommodation with all the new technologies to help them ensure that Southend residents are kept safe. There will be a new custody suite with 30 cells provided.