4.6 pm

James Cleverly (Braintree) (Con): According to figures published by the Office for National Statistics in 2014, there are 4,155 businesses in my constituency, but that is almost certainly a considerable underestimate. Many businesses will have started up since the figures were compiled, and many others are not captured by official statistics because they fall below the VAT threshold. Of those businesses, 90% are defined as micro-businesses, having between zero and nine employees. That, too, is almost certainly an underestimate, because it is in the micro-business sector—the back-bedroom business, the converted garage business, the former farm outbuilding business—that we see the most expansion. Those businesses form the cornerstone of the British economy. Other members have rightly spoken with pride about the number of businesses in their constituencies, but it is at that end of the business spectrum, the small and micro-business end, that the largest opportunity for employment growth presents itself.

I was deeply disappointed, saddened and shocked by how infrequently the shadow Secretary of State used the words “business”, “firm” or “company” during the half hour that he spent at the Dispatch Box. The simple truth is that, eloquent as the hon. Gentleman is, and good as he is at using words, the words that he used today were fundamentally flawed. This country is, has been and always will be built on a business foundation, and when the Labour party loses sight of that fact, we are in trouble. I am very proud that my party has presented a Budget with business at its heart.

Paul Scully: Does my hon. Friend agree that what the Chancellor has done is help set businesses free from regulation and lower taxes, whereas Labour tends to add regulation and layers of bureaucracy, which makes it far harder to start and grow a business?

James Cleverly: As is often the case, I am in considerable agreement with my hon. Friend, who I know shares my passion for, and understanding of, small business.

I feel guilty that I have not yet congratulated my hon. Friends on the Conservative Benches who have just made their maiden speeches. I will now set that right. Both of them have strong business backgrounds and credentials—my hon. Friends the Members for Kensington (Victoria Borwick) and for Brecon and Radnorshire (Chris Davies). I almost said “Brecon and Renfrewshire”.

Kwasi Kwarteng: Renfrewshire is in another country.

James Cleverly: That would be a big constituency.

I also wish to put on record my huge admiration for the hon. Member for Paisley and Renfrewshire South (Mhairi Black) for her excellent and punchy delivery of what was an impassioned and very well thought-through maiden speech—I have already written a personal note

14 July 2015 : Column 791

to her. Her maiden speech was more political than I would perhaps have delivered, but it was none the weaker for that.

An understanding of small business is essential if the British economy is to succeed and I am proud that my Government have recognised the significant part small businesses play not just in the economic prosperity of this country, but in its social prosperity. Employment does not just give people the opportunity to pay the bills; it gives them a sense of worth and place, and it is a foundation stone in their lives that enables them to blossom and flourish in so many other areas.

Wendy Morton: Does my hon. Friend agree that small businesses are often not just the backbone of the local economy, but are at the heart of the local community?

James Cleverly: The word “community” is key, because businesses are as much a part of any geographical community as the people who live in it. We lose sight of that at our peril.

Barbara Keeley (Worsley and Eccles South) (Lab): I feel the need to defend my hon. Friend the shadow Business Secretary, who is being unfairly attacked by Conservative Members. It is being said that he did not even mention business in his opening speech. [Interruption.] I am one of the people on this side of the House who does have a business background; I have a very substantial background in the IT sector, supporting manufacturing industry up and down the country. An extensive section of my hon. Friend’s speech addressed the need to do something about business rates, but there was no answer from the Secretary of State on that point. I think—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We must have briefer interventions.

James Cleverly: I will take it that the hon. Lady misheard the opening of my speech. I did not say that the shadow Business Secretary failed to mention business; I said I was horrified by how seldom he used the words “business” and “firm” in his speech.

Kwasi Kwarteng: The broader point my hon. Friend makes is absolutely right: in the run-up to the election the Labour party gave absolutely no indication whatever that it had the faintest interest in the wealth-creating business part of this country. There was—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. The hon. Gentleman has made his speech; I do not need to hear a repeat of it.

James Cleverly: It does not matter what my hon. Friend or I think, or what Labour Members think; what matters is what businesspeople think, and the feedback I had—

Barbara Keeley rose

James Cleverly: I am running short of time and have been very generous in taking interventions, so if the hon. Lady forgives me I will continue.

14 July 2015 : Column 792

The message that came through loud and clear on the doorsteps when I visited businesses in my constituency during the election campaign was that they did not feel that the Labour party understood them or was sympathetic to their plight. The hon. Member for Worsley and Eccles South (Barbara Keeley) asked me specifically about business rates. We are going to have a business rates review—

Barbara Keeley: When?

James Cleverly: I am not a member of the Government. The hon. Lady needs to take that up with a member of the Government. If anyone wants to make me a member of the Government, however, my door is always open.

Small businesses need a tax and regulatory framework that is sympathetic to their needs, but they also need interventions that will unlock their potential. I am unapologetic that I am now going to mention the need for broadband in rural Britain, and I shall continue to mention it almost every time I get to my feet in the Chamber. I recently visited a business in my constituency, ESco Business Services Ltd. It provides services to the magazine industry, dealing with magazine subscriptions and prizes and so on. It is a digitally enabled business, and much of its work is done online. It is in a building in the middle of the countryside, near the picturesque village of Finchingfield. It provides good quality, well-paid local employment, and it relies absolutely on good quality digital connectivity, without which it would be unable to locate where it is. Instead, it would be forced to locate in a nearby city such as Cambridge, or even in London. If we are to spread economic activity in this country away from London, it is really important that we open the door to businesses such as ESco to allow them to locate where the potential employees are, rather than where the broadband is.

I echo the point made about road investment, and I make no apology for once again mentioning the A120, which is sorely in need of attention. My Government understand the needs of small businesses—I am far from convinced that the Labour party does—which is why I welcome the Budget and will be supporting it in the Lobby later.

4.17 pm

Mr David Anderson (Blaydon) (Lab): I congratulate the people who have made their maiden speech today. I particularly commend the very mature speech from the hon. Member for Paisley and Renfrewshire South (Mhairi Black), and I agree with her view that Labour Members and our colleagues from Scotland must form a shared opposition against the Conservatives.

It is well known that British education is among the best in the world. We also know that the more we pay for it, the better it is. And didn’t that show last week, when we saw our Chancellor, the Old Etonian, in action? We are used to the Tories fiddling the figures, but now they are using a new tactic. As well as fiddling the figures, they are misleading by message. Let me give the House some examples. The first, and most blatant, is the renaming of the national minimum wage as the new living wage. That is clearly a farce. It might have seemed to Conservative Members like a real wheeze, a rabbit being pulled out of the hat, but it is nothing other than subterfuge.

14 July 2015 : Column 793

The concept of the living wage—the real living wage—has been around for decades. Back in the 1990s, when the national minimum wage was introduced at a level of £3.60 an hour, I led the Unison delegation to the Low Pay Commission, where we proposed a living wage of £4.85 an hour. We made the case that that was the level at which working people would not need wage support from the state. It is on that basis that the proper living wage has been developed over the last two decades.

The farce is that the rip-off Chancellor wants to con our people by pretending that this new living wage is a genuine substitute not only for the national minimum wage but for the present and very worthy living wage. Added to his attack on young people who will be excluded, and building in the appalling attack on in-work benefits, we now have a new basic wage that is nothing but a con. He has not spelt out what he intends to do to support public sector bodies to pay the so-called new living wage. For example, councils have already said that they will have a £1 billion funding gap in paying their in-house workforce and at least a £500 million funding gap in paying the wages of workers contracted in from private sector service companies providing things such as care for the elderly.

Sammy Wilson: Is that not the flaw in the argument that we move the burden of wages from the taxpayer to the employer? First, there is no guarantee that the timing will be correct, secondly, there is no guarantee that employers can make the payment and, thirdly, there is no guarantee that many employers will even bother making the payment.

Mr Anderson: It is absolutely clear that that is the case and that this was nothing other than a political ruse to try to mislead the country and to wrong-foot the Labour party to pave the way for the Chancellor to move from No. 11 to No. 10 Downing Street. It is nothing other than that.

The Government now call this the new living wage, but we have been here before. We were there in the 1980s and 1990s, when the Conservatives tried to pretend that the community charge was not really the poll tax. We have been with them over the past five years as they have tried to pretend that the spare room subsidy was not a bedroom tax. Just as those two ideas have never stuck, the new living wage will not stick. People know that it is nothing more than half of a new minimum wage that blocks out young people in this country.

I want to move on to something else the Chancellor said last week:

“The left will never understand this, but we on the Conservative Benches know that the wish to pass something on to your children is about the most basic, human and natural aspiration there is.”—[Official Report, 8 July 2015; Vol. 598, c. 330.]

Well, he is half right. The left never will believe that providing for the grown-up children of dead millionaires with a bung from taxpayers while poor families and children go hungry is a basic, human or natural aspiration. What is basic is that far too many families face the reality of sending kids to school hungry, and worrying about where the next meal will come from and whether they can afford to clothe and feed their children. Too many families are worrying about whether to keep the house warm or not, and now they are being hit even harder in the struggle to pay their rent. The hit is £60 a

14 July 2015 : Column 794

week in this city and £120 a week for the rest of us across the nation. When the landlord says, “I want your rent off you,” the tenant has to say, “I’m sorry, I can’t pay the rent this week and, by the way, next week I will pay you £120 a week less than I am now.” I really do not know where those people will end up. That is basic, that is life at the sharp end and that is what is happening in the real world. That is what happens when the children of dead millionaires are prioritised over the children of poor working people. It is an utter disgrace.

Kwasi Kwarteng: Will the hon. Gentleman give way?

Mr Anderson: I certainly will, even though the hon. Gentleman has only been here for five minutes.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I think that I am the judge of how long people have been here. We have already had one intervention from Kwasi Kwarteng and I can assure the hon. Gentleman that he has been here for a lot longer than five minutes, although it might only feel like that.

Kwasi Kwarteng: I promise that my intervention will not last five minutes. Who are the dead millionaires that the hon. Gentleman is talking about?

Mr Anderson: The people who die leaving property worth £1 million. In the past, some of that would have been taxed and now it will not be. Instead, the Government will tax poor working people, people who are on the dole and people who have more than two kids—they can have two kids, but no more.

Let us also consider the deliberate misuse of language by this Government over the past five years. They have replaced the notion of social security with the idea of welfare, yet they pretend to be the workers party. The concept of social security is crucial to the notion of how civilised we are in this country. Social security underpins the lives of working people and is based on the real concept of people being in this together, with a national insurance scheme that we all pay into if and when we can work and a security net that will support us when we cannot work for whatever reason. I know that the Conservative party has spent the past 10 years trying to paint everybody who uses public services or needs social security as a skiver and not a striver, or a shirker and not a worker, to further its own political narrative. That despicable tactic has to be challenged as the poor, the vulnerable, the ill, the young, the women and the disabled people of this country struggle to make ends meet in desperate times. They are the people the Tories are making pay for the economic mess that their friends in the City, the banks and the hedge funds got us into.

At the same time, the Tories are attacking the millions of public sector workers in this country who take care of the nation by freezing their pay for what will become a decade. We have to stop making nurses, careworkers, firefighters, police and other public sector workers pay the price for the failure of the Tories’ friends. Let us acknowledge in the debate about productivity the productivity gains that have been made in the public sector, where far fewer people are doing a lot more.

James Cleverly: Will the hon. Gentleman give way?

14 July 2015 : Column 795

Mr Anderson: Yes, because I am going to mention the hon. Gentleman in a minute.

James Cleverly: If the hon. Gentleman is so proud of his party’s credentials in relation to working people, perhaps he would like to explain why the working voter has deserted his party for mine and even for the United Kingdom Independence party?

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. It might help if I remind people that this is a Budget debate, not an election debate.

Mr Anderson: Actually, less than a quarter of the people of this country voted for the Tory party, and the vast majority of them would not be traditional working people. More than 75% of the people of this country did not vote for the Tory party.

Let us acknowledge that people in the public sector have made great sacrifices. The hon. Member for Braintree (James Cleverly) told us less than five minutes ago about the 4,000 businesses in his constituency. What about the thousands of people who work in the public sector in his constituency, who he never mentioned once? They have not had a pay rise for five years and will not have one for another five years, but they are the people who pay for his businesses to make their way.

Quite frankly, this Budget stinks—it is as simple as that. It is divisive, it is dishonest, it is damaging, and people inside and outside this House know it. It will not be long before they and those of us who really care about this country stand up against it to get rid of it. We have to send a strong message from this House. On Saturday, going on for 150,000 people marched on the streets of Durham saying clearly, “You’ve got it wrong. We’ve got to stand up. We’re not taking any more of this. We’re sick to death of the poor paying for the failings of the rich.” It is time to change the tune in this country.

4.27 pm

Paul Scully (Sutton and Cheam) (Con): It is a pleasure to follow the hon. Member for Blaydon (Mr Anderson), who gave us a more than adequate demonstration of what one might call the Corbynisation of the Labour party. It is an equal pleasure and a privilege to follow three fantastic maiden speeches. My hon. Friend the Member for Kensington (Victoria Borwick) reminded me that I must go back and flick through my copy of the “Alan Clark Diaries”, which I did enjoy. I was not present to hear the speech of my hon. Friend the Member for Brecon and Radnorshire (Chris Davies), but knowing him as I do, I am sure he lit up the House. I look forward to reading his maiden speech in Hansard. I had to go to visit a constituent who is a black cab driver attending a rally upstairs about Uber. Those people are small business people in their own right, and it is important that we take that into consideration. As has been said, the hon. Member for Paisley and Renfrewshire South (Mhairi Black) gave a fantastic maiden speech, and I know we will hear far more of her in the years to come.

For 20 years or so, I have run my own small business—I refer the House to my entry in the Register of Members’ Financial Interests. Being responsible for other people’s livelihoods, going through bad times when one struggles

14 July 2015 : Column 796

to pay the mortgage and the bills, but also during the good times of real success when one can think, “Actually, that was down to me and my efforts as a self-employed businessman”—those experiences give one a perspective on life, on business life, on working life, on wages and on what it means for people to strive and take opportunities. That is why I welcome so many of the measures that the Chancellor has given us in the Budget, in stark contrast with Labour. In the lead-up to the election, we had what has been described as the heaviest suicide note in history—the Ed stone.

Nia Griffith: Does the hon. Gentleman accept that the Chancellor has tried to imitate one of our policies by trying to raise the minimum wage? He mistakenly calls it a living wage, but it is not at that rate. However, he has not offered any incentives to employers to introduce it, as we were proposing.

Paul Scully: I will come back to the national living wage.

The platitudes on the Ed stone were in stark contrast to the measured policies in the Budget.

Hon. Members can talk about semantics and about whether it is the national minimum wage or the national living wage. What we have seen is a significant—

Christopher Pincher (Tamworth) (Con): Does my hon. Friend agree that the doubling of the workforce at Jaguar Land Rover from 3,000 to 6,000 in three years is not semantics? Those are real jobs for real people—a real opportunity that we are giving those people, which the Opposition never did.

Paul Scully: Absolutely. I could not have said it better. The number of jobs that we have created and the amount of wages that we are putting in people’s pockets are real measures. With this increase in the national living wage, the Chancellor has put cash in people’s pockets.

Kwasi Kwarteng: This is a pertinent question. For the edification of the House, does my hon. Friend have any idea what happened to the Ed stone?

Paul Scully: No. I believe it was in a London warehouse, but your guess is as good as mine. I think it may be auctioned off as a fundraiser at some point in the future.

The lowest paid people in this country will be more interested in the cash in their pockets than in the semantics being played by Labour. The big leap in the national living wage chimes with me as an employer. A good employer does not scrape around the bottom and pay people the bare minimum. The Chancellor has allowed the lowest paid to get more than that. As an employer, I tend to try and look after my employees, pay them more than the market rate and give them other benefits as well, to make them feel valued. In that way an employer gains loyalty and has people who want to work with him as a career, rather than as a job.

We have increased the employment allowance by 50%, which will help ease the burden on employers. A couple of months ago I was at an independent shop in Cheam, Dragonfly. I was speaking to the proprietors with an Evening Standard journalist. When we talked

14 July 2015 : Column 797

about what the Government have done over the past five years, they explained that they had benefited from the small business rates relief, which enabled them to pay very little, if any, business rates. They also explained that they had benefited from the employment allowance. The fact that they knew that term floored the

Evening Standard

reporter. The employment allowance, they explained, had allowed them to take the gamble of taking on a part-time worker when times were tough financially—a gamble, they went on to explain, that had worked out for them and helped them grow their business.

John Mc Nally (Falkirk) (SNP): The hon. Gentleman will be aware that small businesses up and down the country, especially those in the construction industry, are struggling to stay afloat due to incomplete payments. Does he agree that a voluntary approach will not work and that tougher sanctions should be available so that small businesses can spend less time chasing debt and more time creating economic—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. If the hon. Gentleman has such a long list, he ought to do it in two bites, not all at once.

Paul Scully: The combination of measures—paying the lowest paid more and softening the cost to employers with the increase in employment allowance— will help businesses solve that problem themselves.

The Budget is only one part of helping to build growth and productivity. It is the Whitehall part, but we also have the town hall part. We need to look at our changing high streets and at issues such as parking. For example, Ross’s Fruiterers in Worcester Park is a real centre of the community—my hon. Friends the Members for Aldridge-Brownhills (Wendy Morton) and for Braintree (James Cleverly) made similar points—because everybody knows Ross Nelson and uses his business as their local shop. The key issue for him is parking, as it is for hundreds of shops and small businesses in Sutton and Cheam and Worcester Park. He needs stop-and-shop parking so that his delivery vans can come and go. That is a matter not for the Chancellor, but for the local authority and Transport for London, so we need to work in partnership.

The third part of the jigsaw is businesses themselves. As we heard earlier, Governments do not create jobs; businesses do. Having been a businessman for 20 years, I feel that, in becoming a politician, I am a poacher turned gamekeeper. However, I still believe that business people are far better placed than any politician to solve the problems faced by retailers dealing with changing high streets or by small businesses trying to attract more customers and grow. Members will remember Ronald Reagan’s remark that the nine most terrifying words in the English language are, “I’m from the Government and I’m here to help.”

Christopher Pincher: I am obliged to my hon. Friend, who is being generous in giving way. Of course, the Labour party was never there to help business when it was in government, because it introduced regulation after regulation. Is not regulation bad for business, and should not the Government—

14 July 2015 : Column 798

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Mr Pincher, you should have applied to make a speech, rather than making these long interventions. The problem for Mr Scully is that he is coming to the end of his speech, because I said that Members should speak for up to 10 minutes, not beyond.

Paul Scully: Regulation is a key issue for businesses.

I will conclude with the welcome news about the cut in corporation tax. Having inherited a rate of 28%, bringing it down to 20% and now 18% will release £6.6 billion for companies to put back into their businesses to help improve jobs, training and productivity. It is really good news for big businesses in Sutton such as HH Global and Subsea 7, and for small businesses such as Sense Communications, Press 2 Dress and Brasserie Vacherin, which is a fantastic restaurant in Sutton. Some 40% of residents in my borough commute to London, but those sorts of investments help deliver a local option to allow them to work closer to home.

Finally, I echo the Chancellor’s words, which really chime with my Conservative guiding principles, about moving from a low wage, high tax and high welfare economy towards a higher wage, lower tax and lower welfare economy. That is why I very much support the Budget.

4.38 pm

Neil Gray (Airdrie and Shotts) (SNP): Thank you, Mr Deputy Speaker, for calling me to make my maiden speech in this most important of debates. It is a pleasure to follow all the excellent maiden speeches we have heard this afternoon, particularly that of my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black). She has just graduated with a first-class degree in politics. I suspect that her first-class speech will be read by generations of her successors as political students. It was brilliant, powerful and moving. In line with the Scottish National party being in trend in this place, my hon. Friend is now trending on Twitter.

I rise sharing some of the trepidation described in the maiden speeches of many of my predecessors, including the former Leader of the Opposition, John Smith. The fact that he was humble enough to share his nervousness fills me with hope for the next few minutes. If I can be half the parliamentarian and constituency representative that he was, my constituents and I will be doing well.

I owe a huge debt of gratitude to a number of people for helping me to my place here today: first, my brilliant campaign team, led so ably by Graham Russell and Michael Coyle; my Scottish Parliament counterpart and former boss, Alex Neil, who first encouraged me to stand, and whose example I wish to follow; and my family, particularly my wife Karlie and baby daughter Isla, who are a constant source of love and support. It will not be standing up to this most right-wing of Tory Governments or, indeed, standing up for the good people of Airdrie and Shotts that I will find most challenging over the next five years; it will be missing my family when I am here. I am sure that is a sentiment shared by many others in this House.

Lastly, I am incredibly grateful to the 23,887 people who voted for me on 7 May. Fifty-four per cent. of voters in Airdrie and Shotts voted for an end to austerity, for the Scottish Parliament to receive the full package of

14 July 2015 : Column 799

powers promised last year, and for an end to the immoral and financially obscene Trident nuclear fleet. While I am incredibly grateful to those who took journeys of varying difficulty to arrive at the decision to mark their cross next to my name and that of the SNP, I want to make it clear to everyone in Airdrie and Shotts that I am here to represent you, no matter which way you voted or if you voted at all. The SNP won a decisive victory in Scotland because we put forward a credible alternative to austerity and we are recognised as the party of and for all of Scotland.

This result was many decades in the making. We must not just be thankful for the work done by the First Minister and by my right hon. Friend the Member for Gordon (Alex Salmond); we must also thank the giants whose shoulders we stand on. One of them comes to mind more than most for me personally. As I prepared this speech, and as I go about my business pursuing the various issues I plan to in this place, I am truly sorry that I cannot seek the wise counsel of my friend Margo MacDonald. Her experience here, of the Parliament up the road, and of life in general would have given all of us, as new SNP Members, valuable guidance. It would also have been great to tease her about gaining only a 26.7% swing in her 1973 Glasgow Govan by-election, but I would have needed to be prepared for the inevitable stinging but witty rebuke that would have followed.

I must take this opportunity to pay tribute to my most immediate predecessor, Pamela Nash, with whom I shared a positive election campaign. When Pamela took her seat in 2010 she was the baby of the House, at just 25—a veteran compared with my hon. Friend the Member for Paisley and Renfrewshire South. Her election was none the less a fantastic achievement. She went on to represent her constituents to the very best of her ability and championed the cause of those with HIV/AIDS around the world through her position as chair of the all-party parliamentary group on HIV and AIDS. I wish her well for whatever she chooses to do with the rest of her career.

Pamela Nash regularly spoke of her pride at representing Airdrie and Shotts, and I am equally proud and humbled to be here to represent the good people of this constituency. Airdrie and Shotts sits either side of the M8 motorway between Edinburgh and Glasgow and stretches from the Airdrie town boundary, with Coatbridge in the west through to Harthill in the east. To the north are Greengairs, Wattston, Riggend, Longriggend, Stand, Glenmavis, Plains, and Caldercruix; to the south are Holytown—the birthplace of Keir Hardie—Calderbank, Chapelhall, Salsburgh, Newmains, Bonkle, Allanton, Hartwood, and Shotts, which I hope will receive town status from North Lanarkshire Council very soon.

It is a constituency dominated by heavy industry. Communities have literally been forged by mining, steel and iron. The grit, determination and common weal needed for workers, their families and communities to make ends meet has lived on from those days and I am proud to represent people who are warm, generous and welcoming. You need only look at the incredible work done by Airdrie Supporters Trust, Getting Better Together in Shotts, Shape up Shotts, the Moira Anderson Foundation, HOPE for Autism, Basics food bank, St Andrews Hospice, Airdrie food bank and many more brilliant community groups who are supported by the

14 July 2015 : Column 800

kind-hearted people of my constituency to know that the people I represent are as honest and generous as they come.

Looking back on the maiden speeches of some of my predecessors, I was struck by the fact that there was a consistent theme running through them all, and that is how we treat those who are disadvantaged and living in poverty in our society. In that vein, as I look to address this Chancellor’s Budget statement, I must quote what Margaret, or Peggy, Herbison said in her maiden speech on 17 October 1945:

“I realise that I have chosen a subject upon which one cannot be at all non-controversial.”—[Official Report, 17 October 1945; Vol. 414, c. 1281.]

This Government are plotting a path of social engineering with this Budget and by continuing their ideological austerity agenda. For example, saying that families on low wages can receive support for only two children is outrageous. As my hon. Friend the Member for Glasgow Central (Alison Thewliss) pointed out, the fact that there needs to be a form for the victims of rape to “register” their child highlights everything that is wrong with this policy. It is stigmatic, demonising and utterly degrading.

Further cuts to social security will hit not only the poorest and most disadvantaged people in our society, but ordinary working families. The Tories plan to freeze working-age benefits for the next four years, which will fail to protect social security against rises in the cost of living. They also plan further to marginalise young people by scrapping support for those who are under 25 and under 21.

The Government must recognise that they cannot threaten, demonise and sanction people into work. After seven years working on casework in Airdrie and Shotts, I am still to come across anyone who has chosen to live on social security. That is why the Chancellor’s comments about benefits being a lifestyle choice were inappropriate, inflammatory and, frankly, ill judged.

People in my constituency are desperate for work that allows them a decent standard of living and that suits their skills and qualifications. If they cannot work due to temporary illness or permanent disability, or intermittently due to mental illness, they rightly expect the support to meet minimum living standards. There is no doubt that the best way to lift people out of poverty and indignity is through work, but it must be well-paid work.

The wholesale cuts to tax credits that the Chancellor has announced, which include a reduction in the income threshold at which tax credits are paid, remove any benefit from the minimal increase in the minimum wage. For the Chancellor to attempt to present the proposed minimum wage rise as a living wage is a scandal. The living wage is £7.85 an hour outside London, so he is 65p short. It is a con trick. If he gives with one hand and takes back with another, the people will not swallow it.

Freezing public sector pay at 1% for another four years yet again punishes those who are delivering vital front-line services for the profligacy of the banks. It was not the low-paid, it was not the disabled, it was not the under-25s, it was not the public sector workers who got the UK into dire financial straits, so why is the Chancellor choosing repeatedly to kick the legs from underneath those who are struggling to stay on their feet? We on

14 July 2015 : Column 801

these SNP Benches are opposed four-square to the dismantling of the social security system by this Tory Government.

Earlier, I quoted the maiden speech of Peggy Herbison, who must be birling at the state of her proud party. At the beginning of the sitting in which she delivered her maiden speech, Sir Basil Neven-Spence, the then Member for Orkney and Shetland, raised a point of order and begged the Speaker to allow Scottish Members to be called more frequently in the House. Without wishing to prejudge, Mr Deputy Speaker, I doubt that you will need such a reminder of the presence of Scottish Members. The Chair has certainly been more than fair thus far. It strikes me that then, as now, the status of Scottish Members was under discussion, although with the constitutionally kamikaze English votes for English laws proposal, the status of Scottish MPs and, as a result, the Union hangs far greater in the balance.

I am proud to hail from Orkney and a large chunk of my family and friends still live there. I am reliably informed by the learned listeners of BBC Radio Orkney that I am the first Orcadian parliamentarian for 200 years, since Malcolm Laing served in this House between 1807 and 1812. I hope that after next year’s Scottish elections, Orkney returns its first ever SNP representative. I was proud as a schoolboy to carry the Orkney banner at the parade for the reopening of the Scottish Parliament in 1999. It struck me then, as a 13-year-old, that a nation having its own Parliament was perfectly normal. Why on earth would we want decisions about us to be taken elsewhere?

On that note, I will make my closing remarks. As SNP MPs, we are not here just to argue the case for the Scottish people; we are here on behalf of the people of Scotland. We want to build consensus where we find it to deliver progressive policies across these isles. We are here to be a voice for change, and we are determined that the voices of our constituents will be heard, no matter which Standing Order the Government use to try to curb our right to represent them. As we have seen with the Budget, Scotland cannot afford for decisions over its people and resources to be taken here for much longer. That is the ultimate change that we want to see: independence for Scotland. Benjamin Franklin said,

“When you are finished changing, you’re finished.”

That is something we all must reflect on.

4.49 pm

Paul Blomfield (Sheffield Central) (Lab): I am delighted to follow the maiden speech of the hon. Member for Airdrie and Shotts (Neil Gray). Like him, I represent an area whose heritage is in mining, steel and iron, and that has similarly warm-hearted and welcoming people. I thank him for his tribute to his predecessor, Pamela Nash, and for opening his speech with a quote from John Smith, whose premature death was a sad loss to all of us in politics. The hon. Gentleman made a powerful maiden speech that demonstrated values and passion, which indicates that he will bring a great deal to the House.

I want to congratulate the Chancellor—[Interruption.] There is some dissent among my hon. Friends, but he did well to put the issue of low pay in the headlines. He is right that we need to tackle the scandal of low pay, and he was right when he stole the words of the TUC in

14 July 2015 : Column 802

saying that Britain needs a pay rise. The question is whether his measures meet that challenge. Any increase in wages for struggling families has to be a good thing. That was why Labour introduced the national minimum wage.

Robert Flello: Did my hon. Friend spot that when the Chancellor said that the nation needs a pay rise, that did not apply to public sector workers with their 1% rises for four years?

Paul Blomfield: My hon. Friend is absolutely right, and other colleagues have made that point forcefully in this debate.

As we have been reminded today, Labour’s introduction of the national minimum wage was opposed by the Conservatives. I am delighted that they now apparently embrace it. It ended the scandal of poverty pay, providing a safety net below which wages should not fall. But for too many people, the national minimum wage has become the norm, not a safety net, as have zero-hours contracts and part-time hours for those who want full-time work. Alongside those setting up real businesses, there has been a growth in bogus self-employment, particularly in sectors such as construction. Uncertainty has replaced job security, and it has all been aimed at reducing labour costs.

Christopher Pincher: The hon. Gentleman mentions zero-hours contracts. Would he care to tell the House the percentage of the workforce who are employed on zero-hours contracts?

Paul Blomfield: I will tell the hon. Gentleman that too many people are employed on zero-hours contracts, and I could cite countless examples of people in my constituency whose lives have been destroyed by them and who have raised the issue with me.

It was interesting last week to hear Ministers, almost in the same breath, expressing their concern about low pay and then condemning tube staff for their industrial action.

Kwasi Kwarteng: Will the hon. Gentleman give way?

Paul Blomfield: I will not at this stage, simply because other Members want to speak and I am conscious of time.

Over a generation, we have seen a shift of between 5% and 7% of GDP from wages to profits, and from profits to shareholders’ dividends. That has widened inequality and reversed a century of progress towards a more equal society, and it started with deliberate decisions in the 1980s to weaken the bargaining power of working people and the trade unions that represent them. A sensible policy response to low pay would be to strengthen the negotiating hand of working people, but instead the Government made it clear in the Queen’s Speech that they want to weaken their position further with more attacks on the trade union movement.

James Cleverly: Would the hon. Gentleman concede that when tube drivers, for example, go on strike, the people who are hurt the most are not those who can fire up their laptops and work from home but those who, if they cannot get to work, do not get paid for work, such

14 July 2015 : Column 803

as contract cleaners and those who work in the care sector? Is it not the case that when people go on strike it is the low-paid who get hit the hardest?

Paul Blomfield: It is absolutely true that when people go on strike, everybody gets hit, including those on strike. Trade unionists go on strike only with enormous reluctance, because of the impact on services and their wages. The uncomfortable truth for Conservative Members is that improvements in living conditions, health and safety and other workplace situations have been won through the struggle by trade unions.

The campaign for a living wage was a great response to the challenge of low pay. Members on both sides of the House have rightly praised the work of the Living Wage Foundation, but that work has been made more difficult by the Chancellor’s attempt to steal its clothes. We need to be clear. The increase that he proposes to take the wage floor up to £9 for many workers is welcome, but let us not pretend that it is a living wage. Let us call it the over-25s rate or the national minimum wage supplement, or we could just call it the national minimum wage, but he should not damage the brand of the living wage by associating his proposal with it.

We should continue to work to encourage employers to adopt the living wage and to incentivise them to do so. We need to recognise, as the Living Wage Foundation has pointed out, that the rate will need to rise to take account of the cut in tax credits. Here is the rub: although the new rate of the national minimum wage might benefit up to 5 million workers, more than half of them will be worse off—an estimated 3 million families, according to the Institute for Fiscal Studies—by an average of £1,000 a year because of the changes in tax credits. It could not be any other way: an estimated wage uplift of £4 billion is being offset by welfare cuts of £12 billion.

The Chancellor will argue that raising the tax threshold will benefit low-paid workers by taking them out of tax, but he knows that that is not true. He knows that lifting the tax threshold is a regressive tax measure, because it benefits everybody equally except the lowest paid. Six million workers who are already paid too little to pay tax in the first place will not benefit at all from raising the threshold, whereas Members of Parliament will get a tax break. Frankly, in comparison with low-paid workers, we do not deserve one.

Kwasi Kwarteng: Don’t take it then.

Paul Blomfield: Perhaps the hon. Gentleman can explain how people can choose not to take a tax break.

The hon. Member for Braintree (James Cleverly) rightly spoke forcefully about small businesses. I do a lot of work with small businesses in my constituency. They are a driver of growth. When there is any increase in pay, they face a challenge, as does the voluntary sector. They need support, but the Government and the Budget have got it wrong. Support should not have been provided through a greater cut to corporation tax; it should have been provided to small businesses by further cuts to business rates.

The Prime Minister is right that company profits should not be subsidised by the public purse. If he is serious, why not tax listed companies that fail to pay the

14 July 2015 : Column 804

real living wage to recoup the cost? If he is serious about tackling poverty pay, what about strengthening labour market enforcement? We know, for example, that thousands of workers do not even get the national minimum wage in the care sector because employers refuse to pay for travelling time. We debated that in the last Parliament. Ministers admitted that the practice was widespread and said it was illegal, but nothing is happening to chase down those rogue employers and bring them to book.

Robert Flello: On that point, will my hon. Friend allow me to intervene?

Paul Blomfield: I will not because of time—I am sorry.

On the question of the care sector, will the Government find the resources to support local councils—they have been hit harder than any other part of the public sector—in meeting the cost of increasing the national minimum wage and paying workers what they are legally due?

The Government are right to respond to the need to give people a pay rise and have opened a debate, but they will need to do much more to make the difference that working families need, because this Budget fails to do so.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): We now have a maiden speech. I call Martyn Day.

4.59 pm

Martyn Day (Linlithgow and East Falkirk) (SNP): I am grateful for the opportunity to make my maiden speech as the newly elected Member for Linlithgow and East Falkirk. There are so many new Members that I was starting to worry that I might not get the opportunity before the summer recess. Now I need only live up to the high standards set by so many who have gone before me.

I would like to start by extending my gratitude to the parliamentary staff who have assisted Members with directions and procedures. Of particular assistance was my induction buddy, Donald Grant, whose help proved invaluable. May I recommend that the practice of induction buddies be continued for future intakes?

Of course, I would not be making this speech without the trust and confidence placed in me by the local electorate, who returned me with a convincing majority of 12,934 on my first attempt at a parliamentary election. Much as I would like to claim all the credit for my election victory, I am very conscious of the fact that, along with my local campaign team and the wider Scottish electorate, I have played only a small part in the transformational change in Scottish politics. Indeed so transformational has the change in Scotland been that it may better be described as a revolution—a revolution without even breaking a window. Politics in Scotland will never be the same again.

Many long-serving former Members were swept away in the revolution. Such was the fate of my predecessor, Michael Connarty, who had represented the constituency since its creation and the former Falkirk East seat

14 July 2015 : Column 805

from 1992. It would be fair to say that Michael was a man of deeply held political convictions. While we may not always have seen eye to eye on every issue, one area where we were in agreement was our support for Scottish CND and our opposition to nuclear weapons—I will always campaign strongly against nuclear weapons during my time in office.

Prior to the formation of the current seat, much of the constituency was represented by Tam Dalyell, who was the Member for Linlithgow and before that for West Lothian from 1962. Tam Dalyell can claim some responsibility for my personal journey to this House. As a young lad of nine years, I first visited Parliament as a guest of the Member for West Lothian, as he was then. It took me 35 years and 32,055 votes before my return trip. Tam is well known for the West Lothian question, and given the current debate on EVEL—English votes for English laws—Members would be well advised to review his contributions from the 1970s. I have made a point of reappraising his book, “Devolution: The End of Britain?” in which he looked at all four possible answers to the post-devolution problem of Scottish representation at Westminster and concluded that

“not one of them can be reconciled with Britain’s continued existence as a unitary state”.

He was right then, and he is right now. Perhaps less well known is Tam’s entry in “Guinness World Records” for having contested the same constituency against the same opposing candidate at a record number of successive elections—seven times, against Billy Wolfe, in the old West Lothian seat.

Billy very much modernised the SNP in the 1960s, and led the SNP to its previous Westminster high point in 1974, though he was never successful in his own parliamentary attempts. On a personal note, he was my friend and political mentor and he taught me much about decency in politics. It is therefore a particular honour to have achieved the victory that eluded Billy on so many occasions across much of the same geography. I owe a debt of gratitude for the early groundwork that he, along with many other pioneers of the SNP, put in over the years.

That brings me on to the nature of my constituency. Linlithgow and East Falkirk is a varied mix of county towns and villages across parts of West Lothian and Falkirk districts. From Whitburn in the south to Grangemouth in the north, and from Slamannan in the west to Newton in the east, the constituency has numerous landmarks and attractions as well as many famous sons and daughters. My own hometown of Linlithgow, for example, can boast many famous births. The House may think that the most famous of them all is Mary, Queen of Scots, but it is not. The House may think that, following last year’s referendum, it is my right hon. Friend the Member for Gordon (Alex Salmond), but it is not him either. It certainly is not me: I was born in Falkirk. It is in fact Scotty from “Star Trek”, who will be born in the town in 2222!

Scotty is not the only science fiction connection from my constituency. David Tennant, who played Doctor Who, was born in the neighbouring town of Bathgate. For my part, I did not need a TARDIS to travel backwards in time—it only took my election to Parliament. Arriving here has reinforced my belief that we need electoral reform and modernisation, and a good place to start would be with abolition of the House of Lords.

14 July 2015 : Column 806

Linlithgow and East Falkirk lies between a rock and a hard place, being situated midway between Edinburgh and Glasgow, and enjoys good transport links across the central belt of Scotland. Ironically, the weakest link in local transport connections lies at the very heart of the constituency at the Torphichen bridge over the Avon gorge. The inadequacy of the bridge was described by one of my predecessors, Manny Shinwell, when he was MP for Linlithgowshire in 1922 as being

“unfit for the horse and cart”.

It is scantly better today.

The area was of course the heart of the shale industry and is now subject to much speculation regarding fracking. Let me make my position clear: I just dinnae like it. I will work with local groups in the constituency to oppose fracking applications across the local area.

The villages of Westfield and Torphichen, at the heart of my constituency, can lay claim to being the birthplace of the modern SNP, having been continuously represented at local government level since 1963. I myself was one of the SNP councillors for a number of years in that area. Of course, the claim to the birthplace of the modern SNP will also be hotly contested by the neighbouring towns of Armadale and Bo’ness, which were returning councillors as far back as the 1940s for the SNP. My stint as a councillor has now ended after 16 years on West Lothian Council.

Every Member will tell the House that theirs is the best constituency to visit and so will I, but they do not just have to take my word for it: so attractive is my constituency that other Members are trying to claim parts of it. Take the Falkirk Kelpies for example, which my hon. Friend the Member for Falkirk (John Mc Nally) tried to claim. I can understand why, but just for the record the Falkirk Kelpies are in Grangemouth and lie just within the boundary of my constituency. Perhaps, in the spirit of cross-constituency relations, I could offer to share this magnificent attraction with my hon. Friend and promote the wider local area together.

As well as impressive tourist attractions, the area in general is outstripping Great Britain and Scotland across a number of indicators, including population growth and economic activity. The real level of unemployment in the constituency depicts a falling trend in recent years. However, it remains largely a low-wage commuter economy, and the Budget’s proposed minimum wage con-trick will see many families in Linlithgow and East Falkirk on average £1,000 a year worse off.

Let me end with an apocalyptic reminder that my constituency also has the distinction of being the scene of the first modern political assassination, when Regent Moray was shot by a firearm in 1570 while riding through Linlithgow high street. So let us be under no illusions as to what fate may befall any of us should we fail to meet our constituents’ expectations. Therefore, to my constituents, family and friends I give this commitment: I will work tirelessly as your representative; I will not go native; and I will not be seduced by the political bubble, but I will enjoy my stint behind enemy lines working on your behalf.

5.6 pm

Mr Jim Cunningham (Coventry South) (Lab): I congratulate the hon. Members for Paisley and Renfrewshire South (Mhairi Black), for Airdrie and Shotts (Neil Gray)

14 July 2015 : Column 807

and for Linlithgow and East Falkirk (Martyn Day) on their three excellent maiden speeches. I grew up around Airdrie and Shotts, so I know the area very well.

Let me remind the Government that Labour certainly did not cause the deficit. It was caused by events in the United States. Many people have heard me say that before so I will not go over old ground, but listening to Conservative Members we could think that they had been brainwashed into trying to brainwash us into thinking that we did it. We have fought the general election and that one should be put to bed.

Conservative Members also talked about visiting Rover and about Jaguar Land Rover. Let me remind them that we saved Rover when it collapsed in 2001. The previous Labour Government encouraged Tata to invest in Jaguar Land Rover, so we do not need any lessons from Conservatives about who did what in relation to manufacturing.

I have listened to Conservative Members make an argument on productivity two or three times now, but there is a difference between efficiency and productivity. Productivity is what we actually produce and efficiency is how we get people to do that. The Government should understand and distinguish between the two. The other issue is that of skills. I would support the Government on anything they do in relation to skills. If we look at Germany’s economic recovery, we see that there was a training levy on most of the businesses in Germany. We have had debates on that for many years and the Government have just woken up to the fact that if they want to improve productivity in this country, this is one of the areas that has to be looked at.

We should remember that the Budget did not provide for public sector workers. The Government talk about the value of nurses and doctors in the public sector, but they never put their money where their mouth is. They should have given them a decent wage increase. In the past five or six years, we could argue that the 1% increase is actually a 6% cut in their living standards. Of course, in general terms there has been a 6% or 7% cut in wages throughout the public and private sectors. We should bear these things in mind when we listen to what the Government have introduced in the Budget.

Mr Gregory Campbell (East Londonderry) (DUP): Does the hon. Gentleman agree that the Chancellor also appeared to miss the geographical distribution of private sector jobs? The problem in the UK is that so much of our economy is concentrated in the south-east of England. The regions of the UK need to see the benefits from this and future Budgets.

Mr Cunningham: I agree with the hon. Gentleman. The Government, and sometimes previous Governments, have governed on the basis of what London and the south-east think, forgetting there are about 45 million people in this country outside London and the south-east. Any Government pursuing an economic policy should remember that.

As many Members have mentioned, the Budget contains cuts to tax credits that leave the poorer worse off. I will not waste everybody’s time repeating the figures that others have already mentioned, but I thought it interesting that, despite the Government’s talk of manufacturing,

14 July 2015 : Column 808

only once in the Budget did they talk about exports. This country, being a trading nation historically, thrives on exports, so I am surprised that a Government who want to improve the economy did not talk much about exports.

Robert Flello: I am listening intently to my hon. Friend, but there is another side to it: the UK is being flooded with cheap imports subsidised by overseas Governments. This Government are not acting strongly enough to deal with the issue at the point of entry or to address the safety of some of these imports.

Mr Cunningham: I am sure you will remember, Mr Deputy Speaker, that when we were on the Trade and Industry Committee, we discovered that the Americans were using their defence budget for research and development. The private sector benefited from that because it did not carry that overhead of research and development, which can be at least 50% of any company’s budget and even more than wages. I agree with my hon. Friend, therefore, that the Government should be looking at that.

The Chancellor’s boast—if you want to put it like that—about the living wage is, when we actually analyse it, a con. The living wage as proposed by the Living Wage Foundation is 60p an hour higher than the Chancellor’s proposed amount, and much more inside London—although I do not have the exact figure for London. His proposals have even been criticised by the Living Wage Foundation. The cost of living varies between regions, and for those on low pay, each penny matters. We can only assume that he is rebranding the national minimum wage to muddy the waters. It is political smoke and mirrors to avoid comparisons with the recommendations of that independent charity and to avoid criticism of his low-pay economy. Once again, he has also ignored young people by excluding under-25s from the proposals.

The massive cuts to tax credits will utterly undermine any positive outcomes from the increase to the minimum wage and leave 13 million families worse off, according to the independent Institute for Fiscal Studies analysis, which has also shown that the poorest will be negatively impacted far more than the well-off. Once again, the low-paid suffer. Much is paid in tax credits because of the Chancellor’s low-pay economy, but slashing tax credits will not make the problem of low pay go away.

Simon Hoare (North Dorset) (Con) rose—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. The hon. Gentleman needs to hear a lot more of Mr Cunningham.

Simon Hoare indicated dissent.

Mr Deputy Speaker: Have you been sat there all along?

Simon Hoare indicated assent.

Mr Deputy Speaker: I apologise. In that case, by all means come in.

Simon Hoare: Thank you, Mr Deputy Speaker, but you have now put me off my stride.

14 July 2015 : Column 809

Given that we have had tax credits for so long and that low pay is becoming endemic, tax credits have clearly not incentivised employers to increase pay. Why then is the hon. Gentleman opposed to their reduction to encourage employers to do just that?

Mr Cunningham: The hon. Gentleman is entitled to his opinions. I do not think tax credits are endemic. Most people I have ever come across prefer to work for a decent wage. They do not want a subsidised wage, but the employer is never going to pay that decent wage on the basis of the Government’s proposals. If they really believe that, they are deluding themselves, because quite frankly employers do not like spending money.

The Chancellor has announced plans to scrap maintenance grants and replace them with repayable loans. These grants are offered only to the poorest students, so that will saddle more debt on those who already get the least help and support, while well-off students remain unaffected. This, along with the under-25s not receiving the new minimum wage and the under-21s not receiving housing benefit even if they have no parental support, shows that the Chancellor is not interested in helping young people to succeed and get on in life.

The Budget shows, once again, the Chancellor’s contempt for the west midlands. He mentioned the northern powerhouse three times in his Budget speech and the north more generally seven times, yet he mentioned the midlands only once, with no distinction made between east and west and no mention of the vital infrastructure investments required to ensure a balanced economy across the UK. Once again, the west midlands has been overlooked in favour of the Chancellor’s pet projects. This is a Chancellor who cares more about press headlines than pressing need. A future west midlands combined authority would represent the second biggest economic area after London, yet the Chancellor ignores it at every turn.

The rise in the minimum wage is welcome, but the fall in tax credits will leave millions worse off. The Chancellor’s changes to inheritance tax also benefit the wealthy few at the top of society, not those at the bottom. He has made scant proposals to remedy the housing crisis. The number of homes and the cost of rent and mortgages have been ignored. Rent has become a very big issue in this country.

This is a Budget that ultimately fails young people. Once again, the Chancellor has failed to give the west midlands either the time or support it deserves. All his changes are an attempt to paper over the cracks of a low-pay economy that only works for the few.

5.17 pm

Robert Flello (Stoke-on-Trent South) (Lab): This was a shambolic, shameful, pitiful Budget, more interested in grabbing headlines, trying to get the Chancellor in the slot for a future place in No. 10 and trying to lay political traps. This was not a Budget for the future of Britain. My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) had it down to a T: this is a Budget to provide cover for the Chancellor to shrink the size of the state. That is all that this has been about.

The Secretary of State for Business, Innovation and Skills talked about security, but security for who? There is certainly no security for the working poor of this

14 July 2015 : Column 810

country, those on zero-hours contracts or the people who provide care on the minimum wage who do not get paid for their travelling time or travelling costs, who have to provide their own uniforms and who quite often have to contribute towards any training they receive, if they are lucky enough to get any. In short, this was a Budget providing no security whatever for the poorest, the most vulnerable or the weakest in our society, but plenty of security for multimillionaires looking to pass on assets and for other people.

The Secretary of State also talked about this great plan that the Government have got. They had a great plan in 2010 that was supposed to pay down the deficit over five years. That great plan failed to do that because it stalled the economy for three and a half years—three and a half years to get back to the same level of growth we had in May 2010. So much for hard work rewarded. No matter what the Chancellor thinks, there are people who work very long hours who can only dream of limiting their hours to those in the working time directive and who can only dream of a decent wage and being able to come back to a home that they can afford to live in. Hard work rewarded? There has been a lot of hard work from those people and very little reward for what they do.

I want to take a quick canter through some of the measures in the Budget. Much has been made about the supposedly national living wage. What an absolute con! The living wage has been put at £7.85 or £9.15 in London. The aspiration over the term of this Parliament will be to reach £9 by 2020.

So talk about this being a living wage is simply not the case. The proposal for it to be set at £7.20 is already well short of the necessary £7.85. As has been said many times, including by my hon. Friend the Member for Sheffield Central (Paul Blomfield), setting the living wage takes into account tax credits and additional support. Actually, the real living wage should be recast at a higher figure now that so much of people’s tax credits has been wiped out. This aspiration for what amounts to a rebranded minimum wage is nonsense.

To pick up on an earlier exchange, many employers have, sadly, seen the national minimum wage as a reason to dumb down wages rather than to use it as a baseline. Here there is an issue with tax credits because some employers have indeed said, “Hang on, let the state subsidise our profits and we’ll pay the minimum wage.” Those self-same employers will not now say, “Well, we should not have done that even though we did, but we are now going to put the minimum wage up to a proper living wage level”. Of course not. They will keep people working on the same minimum wage and see that their workforce are worse off on account of the reduction in tax credits.

Yet again, this is all about pulling the rug from under the working poor. The Chancellor makes great play of how the Government want to help people in work. These are people in work; they are people who are doing their best and working very long hours, but they are having the rug pulled from under them.

We hear talk about tackling aggressive tax avoidance and evasion, yet this Government have made various attempts to deal with it. We have seen various attempts to introduce general anti-avoidance type provision, but none of them had teeth and none was really designed to address the situation. I remember from when I was a tax

14 July 2015 : Column 811

and finance adviser in a previous life that people were capable of coming up with schemes to get round legislation within minutes. The Government have known about this for a long time; this is not new. To be fair to the Government—I rarely try to be fair to this particular Government, but I will be on this occasion—from time immemorial, Governments have not seized the opportunity to provide for proper anti-avoidance measures that will have teeth and will work. There are simple ways of achieving that.

As we have heard, reductions in public spending are about trying to take us back to a small state. The proposal to increase personal allowances, much heralded at the Dispatch Box, sounds wonderful, but it is all jam tomorrow. It is a £400 increase in the personal allowance, which is nowhere near the level it should be and nowhere near the level necessary to provide a genuine living wage in the sense of a basic amount that people need to live on. People will continue to earn less than they need to survive—and will be taxed on it, thrown into the bargain. Raising the threshold for higher rate taxation and raising the personal allowances has provided double help for those on higher incomes, who will see less of their income taxed.

Nia Griffith: Does my hon. Friend suspect that the Chancellor has deliberately renamed this “the living wage” so that he can break the promise of taking everybody on the national minimum wage out of tax?

Robert Flello: Absolutely. That could well be one of the motives behind it: it is certainly not about giving a genuine living wage to people, and it is certainly not about ensuring that people who work 40, 50 or 60 hours a week just to make ends meet will actually be able to secure a decent living wage. As I say, £7.20 from next April is already short of the £7.85 needed to take tax credit changes into account.

Let us move on to some of the Chancellor’s real friends in all this and consider inheritance tax and the increase to a £1 million threshold. How many people will benefit? It will be a tiny number, and that has to be set against the millions of people who are, to quote the Secretary of State’s words, “hard work rewarded”. It is nonsense, and it shows where the Chancellor’s thoughts lie and who he is really concerned about.

The reduction in corporation tax is another issue. On the face of it, it might seem very good. We already have one of the most competitive rates of corporation tax, but what about the small businesses that are not corporations or not incorporated companies? What about those small businesses that, as sole traders or partnerships, are the lifeblood of our country? What of the small businesses that do not pay corporation tax, for which it is not an issue?

Another item on this long list of measures is the introduction of a supplementary tax on banking sector profit versus the bank levy. I suspect—and I fear that I am right—that more smoke and mirrors has been going on in respect of what the levy was levied on and what profits will be subject to the supplementary tax; I suspect that this will work in favour of the banks.

The increase in insurance premium tax is another measure that will hit those on the lowest incomes. The Minister shakes his head, but there are no two ways

14 July 2015 : Column 812

about it. People who are already stretching their budgets to try to afford their contents insurance, for instance, will then be hit by a massive increase in insurance premium tax, from 6% to 9.5%.

As for the proposals for the Chancellor’s good friends, those with non-domiciled status, they are welcome on the face of it, but how soon will it be before someone comes up with a great ruse to get around the “15 of the previous 20 years” residence rule? How soon will it be before someone says, “That is OK; I will go abroad for a year, and then restart my clock”? How soon will it be before someone takes advantage of some scheme or other? Why not be more assertive, and take much stronger action?

I am conscious that time is beating me again, Mr Deputy Speaker, but I want to draw attention to a few more points. There are to be more apprenticeships, but the question is the quality of those apprenticeships. The ending of student maintenance grants will hit the poorest yet again—in this instance, the poorest students. I have already made my point about the public sector pay increase.

Buried among these measures is the reduction in the backdating of housing benefit from six months for working-age claimants and three months for pensioners to a maximum of four weeks. It is not really about reducing benefit; it is about saying, “If you were not quick enough to spot the benefit that you were able to claim, or if the paperwork was not processed, or if you are a pensioner who struggles with paperwork, you will lose out.” That will save £10 million, which is outrageous.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Will the hon. Gentleman speed up a bit? I shall have to impose a limit on speeches if he does not finish his speech very quickly.

Robert Flello: I thought it important to put that point on the record, Mr Deputy Speaker. As you will have noted, I have just discarded most of my speech.

Let me say just four more words. Well, eight: infrastructure spending, fuel duty, investigation of immoral or illegal economic issues such as the farming of dogs and cats, and a huge shortage of commercial drivers. Where was the Government’s help when it came to putting more drivers into the economy?

Thank you for your patience, Mr Deputy Speaker.

Several hon. Members rose

Mr Deputy Speaker: I do not think that I have much more. If Members aim for eight minutes from now on, everyone will have the same amount of time. I call Nia Griffith.

5.27 pm

Nia Griffith (Llanelli) (Lab): Thank you, Mr Deputy Speaker. Did you say 10 minutes?

Mr Deputy Speaker: I said eight.

Nia Griffith: In that case, let me very briefly congratulate those who have made their maiden speeches today, before turning to the subject of the steel industry.

14 July 2015 : Column 813

Let me begin by thanking the Minister for Small Business, Industry and Enterprise for being so helpful last week by voting to retain anti-dumping measures for wire rod. The steel industry is being flooded out by a massive increase in imports from China, and it is important for us to work with other EU countries on anti-dumping measures. I hope that the Government will take the same approach to measures in relation to steel reinforcing bar, grain oriented electrical steels, and cold rolled steels.

Let me now say something about the EU compensation package. As we know, the Government set the carbon floor price too high, thus causing considerable difficulties to the steel industry. They have now come up with a compensation package for energy-intensive industries, but it is still a long time until April 2016. Will the Government think again about whether the date could be brought forward, and will they make absolutely certain that the package will not be cut?

As well as the problem of the carbon floor price, the steel industry faces the challenge of the EU emissions trading scheme. I firmly believe in working with the EU to create a level playing field, and I believe in the need to reduce our carbon emissions, but the energy-intensive industries need special consideration. It is important that the Government work with them so we actually achieve those goals, rather than achieving what is called carbon leakage—manufacturers going elsewhere where they are allowed to get away with higher emissions levels. There is a lot of work to be done here.

Business and industry need absolute certainty as they plan ahead and invest, and I am disappointed at the infrastructure projects that have been scrapped. The cancellation and postponement of rail projects and other infrastructure projects is very serious both to our skills base and our manufacturing industry. I am pleased that electrification is still planned for the railway line to Swansea, although I would like to see it come a lot further west, but it has still not started. I urge the Government to make sure that goes ahead with full speed.

I would like the Government to make greater efforts to maximise the UK input into the supply chains for such infrastructure, too. It is possible within EU regulations to include in tendering criteria a recognition of the benefit to the local community. Other EU countries manage that very effectively, and we should do a lot more in this regard.

Roger Evans from Schaeffler in my constituency of Llanelli is working with the Swansea tidal lagoon to maximise the proportion of supplies for the construction of the lagoon that is sourced locally in Wales and the UK. He is to be applauded for his efforts and I hope the Government will take note and do likewise, and that they will also strike the right price for the tidal lagoon to make it economically viable.

Business and industry need absolute certainty. We saw the Government cut the feed-in tariffs unexpectedly sharply without consultation, resulting in manufacturers and installers—many of whom had spent a lot of money training up as solar panel installers—going out of business, and now the Government’s sudden cut to the wind turbine incentive is again threatening manufacturers. When such decisions are made, they should not be knee-jerk, politically motivated decisions; there should be proper consultation with the industry and sensible

14 July 2015 : Column 814

lead-in times for any changes. There will now be a massive knock-on effect on the manufacturers and installers of wind turbines.

On the financial changes in the Budget, I welcome the national minimum wage going up to £7.20 next April, but it is, after all, a national minimum wage and it is high time it did go up to that amount—and the Chancellor promised ages ago it would go up to £7. I am very concerned, however, that it does not apply to those under 25, and I am extremely concerned about the loss of tax credits. They are an important part of our current taxation system. As has been mentioned, a couple on the current minimum wage with two children gain £1,500 but lose £2,200 in tax credits. We must raise the wages first, before scaling down any tax credits. This hits those on the lowest incomes who are often dealing with problems of insecurity, juggling more than one job to make ends meet, and working antisocial hours.

We still need a crackdown on zero-hours contracts as well. It is not enough to do what the Government did, which was say “You shouldn’t be prevented from taking another job.” They must do a lot more to try to ensure people can have proper contracts. USDAW has done a lot of work in this regard by getting annualised contracts that allow flexibility for employers and employees, but guarantee an agreed number of hours, so offering some security and chance of planning ahead for workers.

The cuts to tax credits will have a massive knock-on effect on local economies. People on low incomes out of necessity use their money immediately, putting it back into the local economy. There are wards in my constituency where Government changes over the past five years have already led to a loss in income of an average of £800 to £1,000 per person per year. Add to that the new cuts to the tax credits and we will see even more money sucked out of local economies. That is bad news for local business and could lead to further job losses.

I was shocked a fortnight ago to hear the Secretary of State for Work and Pensions say that the way for families to get out of poverty is through education and getting higher paid jobs. Of course it is, but in the meantime they need help. They cannot get that education and move into higher paid jobs in two minutes; we are talking about very long-term goals. What we are seeing in this Budget is a cut to what was a grant and has now become a loan for going into higher education for those very families on the lowest incomes.

We are also worried that the Government are removing the cap on the £9,000 fees for what are probably going to be the most sought-after and prestigious universities. Again, they are creating disincentives for people from less well-off homes to achieve the best and go to the very best universities. These are extremely worrying features of the Budget. Obviously, people want their children to do well—

Mr Speaker: Ahem.

Nia Griffith: I am sorry, Mr Speaker, are you suggesting that I should finish? I thought I was allowed eight minutes.

Mr Speaker: Yes, eight minutes.

Nia Griffith: In conclusion, then—

14 July 2015 : Column 815

Mr Speaker: Order. There is not a formal limit at this stage, but colleagues are being encouraged to stick to eight minutes to give everyone a decent chance of getting in. However, it is up to the hon. Lady at this point.

Nia Griffith: Thank you, Mr Speaker.

Very briefly, tax credits are extremely important for those who work part time, who have to juggle childcare responsibilities or who simply cannot find enough hours’ work, and I would have liked the Government to ask those with the broadest shoulders to bear a great deal more of the burden, perhaps by putting up the 45p tax rate to 50p for those earning more than £150,000 a year. Instead, I believe that there is to be legislation that will limit income tax rises for millionaires. It is completely the wrong priority that it is those with the least money, rather than those with the broadest shoulders, who will be bearing the greatest burden.

5.36 pm

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): The Budget we have just seen was a masterclass in presentation, but a poor one for facing up to the real problems of the British economy. Before we begin, it is worth recalling the recent history of these debates and the economic state of the nation. Both major political parties went into the 2008 financial crisis with identical spending plans, because this Chancellor had pledged to match the Labour Government’s spending plans of the time. The UK’s banking regulation comprehensively failed in 2008, but then so did the system of banking regulation in nearly every other country. Both parties then backed the bail-out of the banks, to protect the people from the banks’ mistakes.

The only other major point of difference between the parties was that on our side we favoured a stimulus, a decision replicated in most other countries at the time, and which I believe was correct, but which the present Chancellor and the Conservatives opposed. The Chancellor also made a serious error of judgment in opposing the nationalisation of Northern Rock.

It is worth saying all that because I believe that the standard of debate on the economy in the last Parliament was fairly poor, given that it was the major issue of that Parliament. The partisanship of Government Front Benchers and Back Benchers reached moronic levels at times, reducing serious questions about the prosperity of the UK to slogans with no real content. I hope that we will see a change in this Parliament.

This Budget has proved one thing above all—there really is no long-term economic plan for this country. Deficit elimination has been put back a further year, which is no surprise to any of us who were here in the last Parliament, because that is what happened every time the Chancellor gave us one of his set-piece presentations.

James Cartlidge (South Suffolk) (Con): Will the hon. Gentleman give way?

Jonathan Reynolds: I will not give way, because of the direction from the Chair. I hope that the hon. Gentleman will forgive me.

It is surely worth noting that the Chancellor has now failed to match either the Darling plan or the original Balls plan for deficit reduction, mainly because his emergency Budget in the last Parliament damaged the

14 July 2015 : Column 816

economy so much. We are now debating an emergency Budget in this Parliament, and let me say that there are some good things in it: the apprenticeship levy; the super-tax on bank profits; the reforms to the non-dom rules, creating just one tax regime no matter how wealthy someone is; and of course the increase in the minimum wage. That is all good social-democratic stuff. I hope we will see those commitments maintained, and that we can soon implement the actual living wage, now that the intellectual argument for it has been so comprehensively won by those of us on the left. I also have no hesitation in welcoming the sustained fall in the unemployment rate in the last few years. Like most people, I am concerned about the relatively poor pay and conditions of some of those jobs—that is a very valid point—but work is a very good thing and the more people who are in it, the better.

However, I put it to the House that if we look seriously through the Chancellor’s presentation, we find some fundamental problems with the British economy that he does not seem eager to address. For instance, we are a country with a terrible current account deficit. We simply do not export enough, but even more worryingly we do not have many sectors of the economy that look as though they could substantially increase exports. There have been many warm words from the Government on this matter, but there has been little improvement over the past three to four years, and the sectors that could provide growth, such as the green economy, have been consistently undermined. We need a proper industrial strategy and a smart interventionist state, with the kind of policies pioneered by the Labour Government during the financial crisis, to address that.

We also have poor productivity, as has been fairly well documented, yet the Government are pausing key infrastructure upgrades, such as the electrification of the trans-Pennine rail line through Stalybridge and, even worse, are making it even more expensive for people to go to university and get a degree to improve their skills.

The replacement of university grants with loans is one of the changes that I absolutely abhor. Of course, students should make a contribution—that issue is now settled—but £50,000 of debt for a three-year degree is surely far too high. I do not feel that Government MPs really understand what that means. It is effectively a 3% rise in income tax for some young people for the first few decades of their working lives. At the same time, they face much higher pension contributions and housing costs than their parents’ generation. There are limits to how hard those people can be squeezed and choosing to squeeze young people simply because older people are more likely to vote is the height of short-term political cynicism.

Housing is surely the most dysfunctional part of our economy. Whether someone is on the right or the left of British politics, how can it make sense that buying a house as an asset will always be a better investment than starting a business or investing in their skills and training? Housing costs for British workers are absurd compared with those in other European countries and we must not only build more houses but start to tax assets more and income less.

That brings me to the part of the Budget that I completely oppose, which is the inheritance tax cut. To put it quite simply, if somebody has mediocre talents but wealthy parents, this is most certainly a Budget for them. In his speech, the Chancellor said that wanting to

14 July 2015 : Column 817

leave a house worth £1 million to one’s children was a thing that the left would never understand. My hon. Friend the Member for Blaydon (Mr Anderson) also made this point. What I say back to the Chancellor is that what the right needs to understand is the anger and resentment of hard-working and talented people from modest backgrounds who find their paths regularly blocked by the less able but more gilded sons and daughters of the very wealthy. I believe that even right-wingers should oppose inheritance tax cuts on grounds of meritocracy and instead support a society in which hard work and ability make a difference to one’s life, not inherited wealth.

We have had much talk of tax credits today. There is some evidence that in some sectors and with some employers, such as the big supermarkets, tax credits have subsidised employers, but the scale of what the Government are doing is extremely worrying. Families with two earners but a modest income and with two children face eye-watering reductions in their household budgets. I would certainly notice if someone took more than £2,000 a year from my household income and there needs to be some acknowledgement from the Government that this will cause real pain. In addition, and crucially, it could also cause a disincentive to go out to work. One of the most compelling reasons for the tax credit system in the first place was that it made work pay. Tax credits also served as an incentive to hire and there could be a negative affect on employment figures as a result of the changes.

One of the Government’s plans that I want to succeed is the northern powerhouse initiative. I must admit that the branding of the policy amuses me somewhat as when I was a teenager growing up in the north-east, the Northern Powerhouse was the name of the biggest gay club in Newcastle, although I am sure that the Chancellor did not mean to name his policy after it. The premise behind the policy is strong. As a country, we are far too geographically concentrated—much more so than comparative European nations—to the detriment of both north and south. The centralising of the British state has not just led to poor decision making but has, in my view, infantilised the great northern cities that were once the masters of their own destiny and the drivers of British prosperity. The Government must be aware that there is a great deal of cynicism in the north about this plan, which has been compounded by the recent pause in the rail electrification programme. If the Government want to show that they are serious about the policy, they need not just warm words but an announcement and some progress in the months ahead. I for one would be happy to work with them to make that happen.

We have a Chancellor whose political skills are largely unmatched but whose economic credentials for promoting the national interest are much more questionable. I hope that in this Parliament and in subsequent Budgets we will start to see a much more effective focus on the real economic problems our country faces, which I believe can be overcome. In all seriousness, I believe that in my lifetime the UK could become the biggest economy in Europe and in doing so could create a society in which wealth and opportunity are much more readily available and much more widely shared. The Budget did not contribute to that and in some ways made it even harder to achieve, and I hope that we will start to see better in the future.

14 July 2015 : Column 818

5.44 pm

Danny Kinahan (South Antrim) (UUP): I thoroughly enjoyed listening to the passion and wit of the new Members who spoke today. Such speeches are a fantastic way to learn about other constituencies and we should all listen. I particularly enjoyed the comments of the hon. Member for Paisley and Renfrewshire South (Mhairi Black) about the weathercock and signposts, although perhaps not for the right reasons. She and I are not necessarily on the same page.

I thought that when I left Stormont I had moved away from trying to get nationalism and Unionism working together and to agree. In my first few weeks here, listening to Members speak, I began to wonder whether left and right would ever learn from each other. I was impressed when, in the Budget, the living wage was introduced and to see signs that, actually, people do listen to each other. Today, listening to people’s detailed speeches, I have found it wonderful to see that there is a lot of input and a lot of detail. I think we can all learn from it.

From the point of view of the Ulster Unionist party and many others, the biggest concern is that the Budget measures will be brought in without proper safeguards and that provision will be taken away before the new system is in place. Given the farce of the welfare reforms in Northern Ireland, my fear is that we will not be able to look after people because the old system has been taken away. This morning, at a meeting of the all-party group on social science and policy, I was appalled to hear about a woman on this side of the water who had had no benefits for four and a half months, and who had turned to prostitution. That is a complete disgrace. We must have back-up all the way through the system, so that no one is ever let down and has no money.

I share colleagues’ concerns about tax credits being reduced and the effects on SMEs and, in Northern Ireland, on families with more than two children. Those changes could work very much against us. I welcome the lowering of corporation tax—we have the powers in Northern Ireland to do that and I wish we would get on with it, but we do not necessarily have the will and understanding that are needed. However, we need a lot of other things as well. When I was at Stormont, I was briefed by manufacturers who said that the basic costs they struggle with are high energy costs, high labour costs and high rates. We need to look at business rates, as action there could lift the whole British economy. I am pleased that there was no rise in fuel duty, and there are many other measures in the Budget that I like, but what really concerns me is not having back-up and safeguards.

From the Union point of view, I am concerned that as we focus on devolving government and giving more powers to cities, countries and everyone else, we will all be forced into just fighting our corner. We have to remember that we all need to work together all the time while we fight our corner.

In Northern Ireland, unemployment is running at 6.1%. That is way better than in my younger days, when it was about 18% in some places, but there are two aspects of those figures that I want to mention. First, a large number of the people in that 6.1% do not have the skills that the world of modern technology requires; they may never have them. We need to find some way of bringing large numbers of suitable jobs to the Province,

14 July 2015 : Column 819

because without employment, the planned welfare changes will never work. We need apprenticeships and assistance. I know the matter is devolved, but we must not adopt the attitude of “devolve and forget”. We all need to work together. Years ago, I worked at Short Brothers in Belfast. I remember visiting Harland and Wolff to see a model of that company building seven aircraft carriers. I know we should not hark back to the past too much, but we need to find jobs—the sort of jobs that the people can do.

I hope that the Government will keep the basis of the Stormont House agreement in place, whether it fails or succeeds, because it contained many measures agreed to help the Province. We are very grateful for them, but we must find a way to move forward. I hope the Minister will promise that those measures will stay. I hope also that the Barnett formula will remain in place and will certainly not go down.

The second matter that I want to raise in relation to the 6.1% unemployment rate is mental health. Last week we rightly heard praise for all those who helped after the bombings in London and learned how to look after those who had lost limbs, lost family or witnessed something awful that still affects them today. Think of the number of people affected by 45 years of the troubles in Northern Ireland. I hope the Minister will put funding in place to enable us to continue learning how to help people cope with the mental issues and difficulties in their lives.

I hope some funding, which is not in the Budget, will be put aside for the victims of the guns and Semtex supplied by Libya. The Americans, the Germans and the French all received compensation, yet nothing has happened for the British. Enough resources should be put in place to make sure that the grit and determination are recognised.

I mentioned “devolve and forget” when it comes to the Northern Ireland governing process. I do not think Members in this place know what is going on. We have Departments in Northern Ireland that do not even work with each other. When I was working on education in the past few years, the Education Minister would not share the funds and the spending reviews; he kept them all to himself. That is the sort of problem we have in Northern Ireland. I thank the House for all the help that it has given us. I hope it will keep the pressure on and get Northern Ireland working. The Budget is one way of doing that.

5.51 pm

Carolyn Harris (Swansea East) (Lab): Over the past few days there has been a great deal of debate and analysis of the Budget. Some who would not necessarily be expected to do so have praised proposals to increase the minimum wage and to increase the personal allowance. However, it is extremely important that we do not lose sight of the fact that, despite those measures, as the Institute for Fiscal Studies confirmed, the Budget is regressive. Contrary to the Chancellor’s rhetoric, it is those with the least broad shoulders who must carry the burden of reducing the deficit.

Cuts to tax credits will have a significantly detrimental impact on families on very low incomes. Neither the increase in the minimum wage nor the increase in

14 July 2015 : Column 820

the personal allowance will make up for these losses. The changes mean that working parents eligible for child tax credit will lose more support more quickly than previously, from the moment they move into work or their salary starts to increase. Many parents will be worse off when the full impact of the Budget is taken into account. Barnardo’s has calculated that a single parent with two children working full-time on the minimum wage will lose £1,200 a year from April 2016, even when the increase in the minimum wage is accounted for.

It gets worse: from April 2017 some of the very poorest families—those with more than two children—will face further reductions in income. They will not be able to get financial assistance through tax credits or universal credit to account for the costs of having a third child, or any child beyond that. We are talking about a significant amount of money for families on very low incomes—about £2,700 a year, or £53 per child per week. New claimants of universal credit will also be affected by this change. A family who already have three or more children and are currently earning above the earnings threshold but lose their job or find themselves unable to work due to ill health will, after April 2017, be able to claim support for only two of their children. As a result, there is no escaping the fact that, from April 2017, families with more than two children will be more likely to live in poverty. Children with more than one sibling are already 40% more likely to be in poverty than their peers.

To illustrate that point, let me give just one example from a Barnardo’s children’s centre. Sarah is a working mother of three whose husband, John, looks after the children, one of whom is not yet of school age. John asked the centre for some nappies. When a project worker visited their home, she noticed that the only food in the cupboard was biscuits and crisps. Sarah and John said that their finances had become unmanageable after their house was deemed too big for their family and they were hit by the bedroom tax. That pushed them over the edge. Now the parents are skipping meals so that the children can eat, and they are too proud to ask for help.

Cutting tax credits will hit some of the poorest and most vulnerable the hardest. The Government keep telling us that it is about making work pay and incentivising those on out-of-work benefits to move back into work. We know that more than six in 10 children are currently living in poverty, with at least one parent in work. It is absolutely absurd that in 2015, and in the fifth largest economy in the world, parents are having to decide who can eat and whether they can afford to put the heating on.

I will finish with two questions for the Government. First, how do they intend to monitor the impact of the cuts to tax credits, and of the Budget as a whole, on child poverty? Secondly, given that they have said that the income measure of child poverty is to be scrapped, to ensure transparency and fairness in relation to measures announced in the Budget and in legislation such as the Welfare Reform and Work Bill, how will they continue to monitor levels of child poverty?

5.56 pm

Stephen Kinnock (Aberavon) (Lab): The Chancellor’s Budget, far from fixing the roof while the sun is shining, will send roof tiles flying while the storm clouds gather. Economic growth is crucial. It brings tremendous benefits.

14 July 2015 : Column 821

Between 1997 and 2008 it lifted millions of people out of poverty. An economy that is not growing is failing, but the question is: what kind of growth do we need?

The fact is that Britain in 2015 is more unequal, divided and insecure than it has been at any time since 1945. We know that inequality between rich and poor in the United Kingdom has widened in recent years. We also know that inequality is bad for economic growth because the majority of the population are not feeling the recovery at all and so are unable to contribute to it.

If the Chancellor wishes to do away with state support for the working poor, he must commit to investing in a genuine, broad-based and deep recovery that works for everyone, based on a real industrial strategy and a plan for long-term economic growth. That has to start with a renaissance in our manufacturing sector. In 1970 manufacturing accounted for one third of the British economy, and now it accounts for barely 10%.

The need to drive such a renaissance is imperative for three reasons. First, the manufacturing sector achieves far higher levels of productivity than the service sector. Secondly, it produces much higher quality and higher-income skilled jobs than the rest of the economy, as well as a far greater geographical spread of skills and jobs than the financial sector produces. Thirdly, it enables us to pay our way in the world. Our balance of trade deficit is currently higher than it has ever been since the 1830s. That is a huge drag on our economy, and it can be dealt with only by increasing manufacturing for export.

Given the central part that manufacturing has to play in building that new kind of growth, it is absolutely imperative that the Chancellor now sets out a new industrial strategy, which I think should be based on six key pillars. First, we must produce highly motivated and skilled young people who are capable and willing to enter manufacturing, engineering and wider industry.

Secondly, the UK has a strong research capability, but we struggle when it comes to driving our new ideas and technologies into the business sector. A proper industrial strategy would provide enhanced support to the Catapult centres, which have provided a welcome boost to the commercialisation of research and development, but much remains to be done and they need more resources.

Thirdly, on energy, there is a pressing need for a 10-year plan that lays out the investment path required to build a secure, competitively priced and clean energy supply. The growth of clean energy is a huge opportunity for the UK economy, with projects such as the Swansea Bay tidal lagoon promising to deliver thousands of high-paid, high-productivity jobs.

Fourthly, there is the UK’s inadequate transport and digital infrastructure. This is particularly important, as it contributes to the chasm that exists between London and the rest of the country. There is a pressing need for a long-term infrastructure plan that would properly connect the country and provide a launch pad for a nationwide manufacturing renaissance.

Fifthly, on finance, the UK’s banking system is fundamentally skewed towards the stimulation of private consumption, asset value inflation, and personal debt. It is essential to create a new financial support system for manufacturing that is geared towards enabling the growth of the manufacturing sector. Germany’s Sparkassen should be the model—truly local banking that is an

14 July 2015 : Column 822

integral part of the regional economy, focused exclusively on lending to start-ups and small and medium-sized manufacturing businesses.

Finally, on procurement, the Government manage a multi-billion-pound budget for the procurement of everything from care services to steel for major infrastructure projects, and their approach is far too laissez-faire. Far more can and should be done to ensure that UK products and services are prioritised for procurement. This can be done without violating EU competition rules simply through tighter definition of value-for-money clauses in tender documents. It is right that contracts funded by the British taxpayer should be won and delivered by British companies.

This industrial strategy sounds wonderful on paper, but it is worthless if not underpinned by strong support for the steel industry, which is the critical foundation industry for our manufacturing renaissance. Steel plays into every aspect of the long-term strategy we need. As the Member of Parliament for Aberavon, which hosts the largest steelworks in the country, I must draw the House’s attention to the importance of the steel industry. No longer can Government-tendered projects such as the refurbishment of the Severn bridge be allowed to go ahead using French steel when the best steel in the world is British.

This Government also need to take into consideration the importance of compensating heavy industries such as steel for the cost of the carbon tax, which eats into productivity. Going back on promises that were made in the previous Parliament would leave steel companies exposed to 70% of the cost of the EU renewable levy policies. That would be seriously detrimental to the steel sector and wider manufacturing, and ultimately harmful to the UK economy.

The time has come for a Government who are prepared to plan for a new type of long-term, sustainable growth that produces high-wage, high value-added jobs and gets the country making and exporting rather than perpetuating the agenda for the status quo of growth fuelled by debt and consumption. Until we have such a plan, I cannot support this Budget. I exhort the Chancellor to go back to the drawing board, roll up his sleeves, and come back with a strategy for a new kind of growth that will build a United Kingdom of strength, purpose and resilience.

6.2 pm

Tulip Siddiq (Hampstead and Kilburn) (Lab): I thought that I would use my time in this debate to speak about the real victims of last week’s Budget: children in this country who have suffered because of the savage blows that have been imposed on their services and the support structure that we provide for them. This savage attack is twofold. First, child benefit has been frozen for the next four years, not taking into account the rising cost of living. Secondly, child tax credit is now going to be restricted to families with no more than two children. Have the Government thought long and hard about what impact these changes will have on disabled children living in families, on single mothers, and on families with low and modest incomes?

My problem with these changes is that they will in no way address the deep-rooted problems that we have in our low-wage, low-productivity economy, with the huge

14 July 2015 : Column 823

discrepancy between the very well-paid and the very poor. These changes will not deal with the problems that we face in the economy.

There is little recognition of how much tax credits have contributed to alleviating child poverty. By the end of the last Labour Government, the proportion of children living in families below the poverty line had fallen from 35% to 19%. It is the Labour Government who can claim credit for lifting more than 1 million children out of relative poverty. Those are things that we are proud of.

The Tories use rhetoric that speaks of tax credits encouraging workshy people, says that people are lazy because they claim tax credits and uses that dreadful word, “scroungers” for people who abuse the welfare state. Well, guess what? The majority of people who claim tax credits are in work. The Government need to realise that. The IFS has pointed out that reducing tax credits weakens the incentives for people to work. At every turn, the Government’s rhetoric on tax credits is wrong. The single largest revenue raiser in last week’s Budget was the scaling back of tax credits, which almost exclusively hits people who are in work.

The Social Mobility and Child Poverty Commission has said that relative and absolute child poverty will increase in the next decade. Given that those figures are about to be released, is it surprising that the Government have said that they will scrap the legally binding child poverty reduction target and are busy trying to redefine poverty?

Ministers do not need to spend time redefining poverty. Instead, they should take the 15 minutes that it takes to leave Parliament and go to my constituency of Hampstead and Kilburn. They should go around the estates of south Kilburn—the most deprived parts of my constituency—and see the families giving up their dignity to queue up for food banks. In winter, those families have to make the choice between eating and putting the heating on. Those are the families who go to work, but for whom work does not pay because we live in a low-wage economy. Those are the things that we have to assess before we make these dramatic changes.

Before we rush through this Budget, which will be damaging to my constituents and constituents across the length and breadth of this country, I ask the Government to consider two things. First, they should think about the impact that the changes to working tax credit and child tax credit will have on women. Child tax credit is claimed more by women, because the main carer in the family tends to be a woman. Working tax credit is needed by women more because there are more women in low-paid jobs, as was demonstrated by the recent debate on equal gender pay in Parliament. Bearing that in mind, they should think carefully about whether they are doing something that takes away the economic empowerment of women in our country. Will the changes mean that women do not feel empowered to go out and work? They must think carefully before making those changes.

Lastly, the Government should think about the impact that restricting child tax credit will have on families with more than two disabled children. At the moment, there is a top-up on child tax credit of £3,000 if families have a disabled child and up to £4,000 if they have a severely disabled child. What will happen to families who have

14 July 2015 : Column 824

three severely disabled children? What will happen to families who have two severely disabled children and one child who is defined as disabled? We need to think carefully before we rush the Budget through.

My plea to the Government is that they go back to the drawing board, listen to what Opposition Members have been saying and think about the effects that the Budget will have on women and disabled children across the country, and on families who want to work, but who cannot get the right wages from that work.

6.9 pm

Geraint Davies (Swansea West) (Lab/Co-op): It is a great pleasure to follow my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq), who made an excellent speech underlining the cruel regressivity of this awful Budget. She particularly mentioned the impact on child poverty, families and women, and the inter- generational poverty that will scar families for life. It is also a pleasure to follow excellent speeches by colleagues from the Swansea Bay city region, my hon. Friends the Members for Aberavon (Stephen Kinnock), for Llanelli (Nia Griffith) and for Swansea East (Carolyn Harris), and a number of maiden speeches, particularly that of the hon. Member for Paisley and Renfrewshire South (Mhairi Black).

This was a Sheriff of Nottingham Budget, robbing from the poor and giving to the rich. In fact, The Economist has commented that taking from the very poorest through tax credit changes and giving to the very wealthy through inheritance tax changes is “indefensible”. That is not some sort of left-wing ragbag but a keenly focused magazine that says it as it is.

We have the Sheriff of Nottingham, the Chancellor, living within his castle walls and feeding his fat noble friends with inheritance tax reductions, while the ordinary people just outside are being hoaxed. With one hand they are being given higher tax thresholds, but with the other they are being pick-pocketed, with something like £16 billion of stealth taxes on things like insurance for housing and cars, and with the vehicle excise duty changes. Even the withdrawal of climate change subsidies will come back and hit them through energy prices, and the withdrawal of BBC funding will hit them through the licence fee.

The Sheriff of Nottingham is also trying to persuade the ordinary people around the castle walls that the poorest people in the forest will not be painfully abused by the tax credit cuts. Instead he is trumpeting the minimum wage increase, which of course will not compensate families on tax credits. In 2012 the Chancellor gave a speech describing the “strivers” and the “skivers” and asking whether it was fair for a shift worker to get up in the morning to go to work and see the closed blinds of his neighbours who live off benefits. Of course, skivers are not eligible for working tax credits and child tax credits, because they are only given to people in work. They are based on the American earned income tax credit, as an incentive to work. Their withdrawal will undermine not only the individuals who are paid the money but business start-ups. The change is thoroughly regressive and counterintuitive to economic growth.

The Budget was more about politics than economics. On the minimum wage, the Chancellor has taken the Labour party’s clothes and hoped that people will not

14 July 2015 : Column 825

notice what he is doing to working families, and the Opposition cannot support him in that. Of course, the cost of tax credits has grown to something like £30 billion, but that is because productivity in the British economy has been so woefully poor that wages have gone down, leading to tax credits going up. In fact, 800,000 fewer people are earning more than £20,000 than was the case in 2010, which is an appalling failure. That is why this Government have borrowed more in five years than Labour did in 13. The Government should have focused on productivity growth in the Budget, rather than on fiddling around with tax and spend so that the Chancellor can position himself against the flamboyant part-time Mayor of London as the next Tory leader.

There is also the appalling situation whereby the third-born in each family will have their tax credits taken away. I wonder if that will be extended to education and health. When the third child, Johnny, has a broken arm and goes to the NHS, will he be told, “Sorry, we can’t treat that, you’re the third-born. Oh, don’t worry, your oldest sister has just died—so it’s alright now”? What is the change about? Is it an incentive for poorer people in society not to breed? Is some sort of positive eugenics returning to the Tories? It really is appalling.

Simon Hoare: Will the hon. Gentleman give way?

Geraint Davies: No, I will not. There is a time limit, and it is not really worth the air.

The overall welfare budget is £220 billion, only £2 billion of which is spent on people on the dole. A great amount of it is spent on pensioners, who are protected because they are more likely to vote. The political calculation is that poorer people are less likely to vote, and certainly less likely to vote Tory. This is a cynical Budget.

Oxford University has suggested that the number of people going to food banks will increase by 1 million to 2 million. I pointed that out to the Prime Minister, and he said, “Oh well. It doesn’t really matter. We won the election.” When I pointed it out to the Work and Pensions Secretary, he said, “Oh well. What can you do? Lots of people in Canada and Germany use food banks.” The Chancellor said, “Well, you know, we’ve got 1% of the people and 3% of the wealth of the world, and we spend 7% on welfare,” as if we should be ashamed and not proud that we, as a developed country, invest in the most vulnerable people to help them into work.

What sort of future is the Chancellor suggesting? Is he suggesting that we cut our welfare down to the levels of developing countries and provide taps and buckets at the ends of streets? What are the values of this Tory Government? The answer is that their values are squeezing the poor because they will not vote Conservative, and squeezing the state with a fraudulent proposition as a backcloth—that minimum wages can replace tax credits that are focused on poor families. The reality is that, under the last Labour Government, the economy grew by 40% in the 10 years to 2008. The banking crisis caused a problem, but by 2010 there was growth in the economy. Since then, debt as a share of the economy has grown from 55% to 80%, basically because a low-wage, low-productivity, austerity-driven Budget does not work.

The Government have driven down wages at the same time as they are putting up tax thresholds, which is obviously not a way of generating significant tax revenues. Therefore, the business model is bust. We need

14 July 2015 : Column 826

investment in productivity, skills and infrastructure. Why are we seeing another situation? Why has the train infrastructure in the north of England been removed or delayed? Why are the poorest given loans rather than grants to go to university?

The Budget is not the way forward for a high-skilled, high R and D, high-productivity and high-wage economy to pay its way. It is flawed economically and it is a political stunt. The sooner we get a Labour Government the better.

6.17 pm

Rachael Maskell (York Central) (Lab/Co-op): It is a pleasure to follow my hon. Friend the Member for Swansea West (Geraint Davies). I congratulate the new Members on making their excellent speeches, particularly the hon. Member for Paisley and Renfrewshire South (Mhairi Black), who drew on the wise words of the late Member for Chesterfield, who is a political hero of mine, too.

At the weekend in York, I talked to local businesses, our public services and those who support the poorest in our community. There were no cries of “Fantastic!” for the Budget—quite the reverse. Those are the people who will live with the consequences of what the Budget creates.

Three themes stand out from my conversations, but they were all left out by the Chancellor, who is more set on driving down our public services and our public sector workers, who, we must remember, have already had a 15% cut to their pay, than he is set on driving up exports and the prospects of so many who are left to flounder as they are stripped of essential resources to help them get by each week. The first theme was generating productivity and good-quality, high-skilled jobs; the second was strengthening public services; and the third was addressing the shameful inequality in our nation that the cuts to 30 million people will increase, and addressing the staggering nearly £2 trillion of personal debt that is being built up.

Today, I will focus on productivity. Unless we grow our productivity—our base—the long-term poverty in our country will be sustained. It is therefore not an either/or strategy, but both. We need to address inequality and to drive up our economy: investment now for future growth.

Obviously, there was deep concern at what came out last week not just in the Budget, but in the productivity plan, which should fix the foundations to create a more prosperous nation. I took the plan and put it through what I call the York test. I asked how the plan would drive the economy in the city I represent, a northern city that is so much at the centre of rhetoric at the moment.

York has so much potential. It could have high-quality, well-paid jobs, and with the considered interconnectivity of a productivity plan we could recreate the city as an engine in the north. I read in the plan lots of suggestions to bring together experts to write a strategy for productivity. If there are many gaps in the road map, having experts come together can help to grow the economy for the future, but time is wasted as we wait for the plan to be developed.

One of the loudest cries that I hear from my constituents —but it is not in the plan—is the need to address the needs of small businesses in York. They desperately want business rates to be addressed, so that our local

14 July 2015 : Column 827

entrepreneurs and business leaders can confidently build a sustainable employment strategy in the light of the ridiculously high cost of premises—another issue that must be addressed.

Kevin Hollinrake (Thirsk and Malton) (Con): Does the hon. Lady welcome the 75% reduction in unemployment in York since 2010, and the 45% reduction in 2014?

Rachael Maskell: I do not accept that those are the high-quality, highly skilled jobs that are so important for growing our economy. In fact, many jobs in York are now zero-hours contracts in the tourism industry, retail and other trades, and the number of people on the minimum wage is a real concern.

While the apprenticeship levy sounds good—I will examine the initiative as it makes progress, in particular to ensure that the apprenticeships are of high quality and not just learning experiences for people in work—we need to view that alongside the cuts in education. York college has experienced a 24% cut in funding for adult courses. Those cuts are in direct conflict with the warm words about supporting a technical curriculum. The small print of the plan also includes higher and higher tuition fees, at the same time as the removal of the maintenance grant—money that people will be expected to pay themselves. Those are disincentives for people to engage in education in the future, so the plan fails the York test on skills.

It is a scandal that the links between education and work have been severed in this country. In schools, colleges and universities, courses do not lead directly to high-quality, good jobs. Education is often in one silo and work in another, and the bridges have not been built between the two. How is it that someone can spend £50,000 on their development to end up in a zero-hours job or having to volunteer to get the necessary experience to get a decent job—experiences that a couple of people reported to me over the weekend? When people embark on a course, we want to see a guaranteed good-quality job at the end of it—a student to job guarantee. That is the sort of initiative that I expected in the Budget last Wednesday to kick-start careers and growth, and to start to help to clear up student debt, which is a scandal in itself, but one for a separate debate.

When I looked at the productivity plan, I had to ask, “Where is the manufacturing strategy?” I could not find it and I did not hear it in the Budget—nothing on good-quality, highly skilled jobs. Where was the real opportunity to develop the housing infrastructure—and the construction jobs that would go with that—that we desperately need? The plan talks of a growth in the number of houses of 40,000 a year, but we need at least 200,000—possibly 300,000—a year. Labour had a programme to ensure that by 2020 we would be building 200,000 houses a year. Of course, the OBR and the IFS believe that the right to buy and the cuts in social rent will slash that already under-ambitious building programme. So the productivity plan fails the York test on housing, even though more housing is central to the city’s ability to grow the local economy.

Where was the environmental strategy on retrofits for our businesses, public services and the domestic market, on growth in renewables, and on science and manufacturing?

14 July 2015 : Column 828

As Labour promised, that would create 1 million more jobs. I am committed to developing a sustainable economy, but the Government’s approach to climate change puts us at further risk of missing our 2050 carbon reduction targets. Not only is there investment in road instead of rail, but the removal of subsidies for onshore wind and the charging of renewable energy users through the climate change levy. This will chase away another potential boom area for our future economy. The Budget fails the York test on sustainability and productivity.

There was nothing in the Budget on upgrading our infrastructure and providing good construction jobs in our schools and hospitals through new build. The state of our schools and hospitals means that this is desperately needed in York. We are seeing a strategy that will not deliver.

I would like to question the Minister more closely on investment in science and research, and on whether any of the money will be coming to our universities to give us the opportunity to ensure that York benefits from good solid jobs by 2020. I would be interested to hear his reply.

Finally, on the northern powerhouse, we have heard much about rail and the northern power cut. York is famed for its rail heritage and the national rail museum. We are at the intersection of the trans-Pennine route and the east coast main line, so we should be the rail hub of the future. We have a real opportunity to grow the northern economy, but that was not in the Budget and that was not in the productivity plan. Will the Minister sit down with me and local MPs to ensure that we have an opportunity to kick-start the economy?

Several hon. Members rose—

Mr Speaker: Order. The Front Bench wind-up speeches will start at 6.40 pm and there are two colleagues who have been waiting for a considerable time. I call Seema Malhotra.

6.27 pm

Seema Malhotra (Feltham and Heston) (Lab/Co-op): The political presentation of the Chancellor’s Budgets has improved year on year. Sadly, we cannot say the same about his economics. That is not to say there were not some good things in the Budget—indeed, many of them were proposed in the Labour manifesto—but there are holes, contradictions and poor judgments running right through it.

The Budget fails as a coherent and strategic plan for Britain’s growth and prosperity. It is also unfair and unjust. Women will be hit twice as hard as men. A couple working full time on the minimum wage with two kids will be £700 a year worse off. People currently paid more than the minimum wage will be even harder hit.

In 2011, the Chancellor stood at the Dispatch Box and proclaimed a march of the makers. He painted a picture of how he saw Britain’s economy growing and being rebalanced away from financial services. There was, however, no plan behind it and it proved to be more of a mirage than a reality. Manufacturing output began to fall in 2012 and 2013, in part as a consequence of the Chancellor’s reckless rate of cuts. It was only when he began to slow the pace of cuts that manufacturing output began to recover. Some economists argue that had he embraced Alistair Darling’s balanced plan for

14 July 2015 : Column 829

reducing the deficit this might have been less likely. The Office for Budget Responsibility forecasts that the Chancellor will miss his export target in 2020 by a massive £370 billion.

Today, I would like to focus on two specific issues: investment in logistics and further education. Local businesses in Feltham and Heston tell me that there is an acute shortage of qualified HGV drivers that is crippling the British road haulage industry, and a shortage of qualified forklift truck drivers for manufacturing and distribution. If our businesses do not have enough support to get their products to domestic and foreign markets, we are holding back growth. There are some welcome proposals in the Chancellor’s Budget, but they do not go far or fast enough for the UK logistics sector.

I welcome the proposed compulsory levy on large companies to fund new apprentices, but it will not come into effect until 2017. We have a national shortage of more than 45,000 lorry drivers, and more than 60% of HGV drivers are over 45, which means that the problem is likely to get worse, not better. At least 40,000 drivers are expected to leave the industry over the next two years, but road haulage firms are able to train only 17,000 drivers a year.

Recently, I attended the launch of West Thames College’s logistics centre at Feltham skills centre, near Heathrow. It is an excellent college delivering key skills training for the logistics sector in the local and national economy. The college, from its reserves and with support from the local enterprise partnership, has funded the new centre, but it is now struggling to fund the courses. In his March Budget, the Chancellor cut the adult skills budget, which funds this training, by 24%, and on 4 June, he announced further departmental spending cuts, which might reduce this even further. In his March Budget, he also promised that the Government would work with road haulage firms on an industry-led solution to the HGV drivers’ shortage, including access to, and funding support for, training, yet last week he proposed no resources to tackle these problems, which was a huge disappointment.

While the apprenticeship levy will help from 2017, the crisis is now. The Road Haulage Association has asked for funding for the “driving Britain forward” scheme, developed with Jobcentre Plus, to train new HGV drivers between now and the introduction of the industry-wide HGV apprenticeship scheme. The logistics industry and the British economy need this support, which is why I shall today be writing to the Chancellor urging him to provide the funding the RHA has requested to tackle the HGV driver crisis between now and the introduction of the industry apprenticeship scheme; to stop further cuts to the adult skills budget; and to allow colleges such as West Thames to provide the logistics training that the industry needs and that Feltham and Heston businesses have called for.

The Chancellor has failed to rebalance the economy. His march of the makers appears yet to have taken its first step. I urge him to show leadership and provide the highly skilled workers that the UK logistics sector needs—a capital investment in the British people and British businesses. Keeping people jobless while companies call out for highly skilled employees makes neither economic nor moral sense. If he really wants to get Britain back on the road to recovery, rather than stuck on the hard shoulder, I urge him to take action now.