The Chancellor of the Exchequer (Mr George Osborne)
I enjoyed what sounded very much to me like a valedictory speech by the shadow Chancellor, going through all the decisions he took and explaining to the House why they were all right. Of course, I paid tribute to him in Treasury questions for the work he did during that period, which was clearly a very stressful one, but it was pretty extraordinary that he did not once accept that he had made a single mistake during those three years—that for all his good manners, he did not once apologise for the fact that he has bequeathed to the incoming Government the worst inheritance that any British Government have faced since the second world war.
Mr Osborne
If my hon. Friend will allow me, I would like to make some progress first.
I guess that the shadow Chancellor is entitled not to apologise. I would only say this to the people who are standing for the leadership of the Labour party. As far as I can tell from their contest at the moment, they seem to think that they just did not speak enough about immigration and Europe in the campaign. Let me tell him: I have done that campaign and I did not get the medal. Perhaps the leadership contenders will at some point turn their attention to the very serious economic problems that this country faces, and tell us what they would do—what they would cut. The amendment that we are being asked to vote for tonight—tabled by the Leader of the Opposition and the shadow Chancellor—states that we need
“a clear plan to bring down the deficit”.
I agree with that; I would happily vote with the shadow Chancellor if he could perhaps tell me exactly what his clear plan to bring down the deficit is because, as far as I could tell, he opposed every single decision that we have taken to try to reduce the deficit.
Mr Ivan Lewis (Bury South) (Lab)
In The Sunday Times, the Prime Minister said that the cuts would be unprecedented in their severity and would change Britain. In The Observer, the Deputy Prime Minister said that the cuts would not at all be as serious as in the 1980s and ’90s, and would be progressive in nature. Can the Chancellor tell us—which is it?
Mr Osborne
It was the shadow Chancellor who said—and we were reminded of this—that the cuts would be deeper than anything that Margaret Thatcher had undertaken, and that was the proposal from the Labour party when it was in government. It is unfortunately an economic fact that the budget deficit that this country faces is higher than at any point in our peacetime history, and whoever forms the Government of this country has to deal with that budget deficit and cannot ignore it. Indeed, there is a rather striking fact about the Labour Government’s proposals, which they left in their Budget book—the shadow Chancellor has a copy in front of him. There are £50 billion of cuts built into the Labour Budget produced in March, and not one single pound of those cuts has yet been identified by the Labour party.
David Tredinnick
Many congratulations to my right hon. Friend on taking up his position. Was not one of the greatest weaknesses of the last Government, which the former Chancellor avoided mentioning, the fact that the number of people in non-taxpaying employment rocketed up and the number of those working in productive jobs that produce taxes drifted down?
Mr Osborne
My hon. Friend is right. There was a profound imbalance in the economy. We heard the shadow Chancellor saying, “What are the Government going to do about the unbalanced economy?” He seems to forget that he has been running the economy for the last three years. His Government have actually been in charge for the last 13 years. If there is an unbalanced economy, the people responsible are sitting on the Opposition Benches.
Mr Osborne
I want to make progress, as I know that a lot of people want to make their maiden speeches; I was talked out of my maiden speech on the day I wanted to give it by over-long Front-Bench speeches. However, I want to give way to the hon. Member for Dudley North (Ian Austin), because I want to know where his Friend the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) is.
Ian Austin (Dudley North) (Lab)
This morning, we all read the Prime Minister’s comments telling us that the cuts would affect every family in the land, and that no one would be exempt from the deep pain that those cuts would cause. Given that we are all in this together, can the Chancellor tell me which public services he and his family rely on, and which they will miss the most?
Mr Osborne
If that is the quality of the intervention by the Labour party as the country faces a very serious economic challenge, it confirms my view that, at the moment, it is not a serious player on the national political stage.
Mr Osborne
I want to make a little progress because a lot of Members on both sides of the House want to make their maiden speeches. I will give way in a little while, perhaps, to Members who stood up.
Of course, the economic situation is the backdrop to the Queen’s Speech. Our country is borrowing £156 billion a year. Our national debt has doubled and is set to double again. Those Opposition Members who think that this is some abstract problem should pay heed to the warning noises from the European continent. Countries that cannot live within their means face high interest rates, greater economic shocks and larger debt interest bills.
Let us consider this one fact, raised by my hon. Friend the Member for Suffolk Coastal (Dr Coffey), which the previous Chancellor refused to publish. The only reason she can deploy that fact in the Chamber is that this Government published it. It is that, on the spending plans that we inherited from the previous Government, British taxpayers are going to pay £70 billion a year in debt interest by the end of this Parliament. That is higher than the education budget, it is higher than the defence budget, and it is far higher than the policing budget. That figure was kept secret from the British people, but we will publish it because people need to know where their money is going.
Mr Sheerman
A lot of brickbats will be thrown across the Chamber today. Surely all hon. Members, on both sides of the House, as people who care about the long-term future of our economy, agree that cuts are necessary, but is it sensible to cut widely and deeply before private investment has recovered?
Mr Osborne
At least the hon. Gentleman acknowledges—it is the first time, either in this debate or in Treasury questions, that we have heard this from those on the Opposition Benches—that cuts have to come. [Hon. Members: “The shadow Chancellor said that.”] I am sorry, but we have just listened to a speech by the shadow Chancellor in which he explained why we should not be trying to accelerate the reduction in our structural deficit, despite the advice of the Governor of the Bank of England, the European Commission, the OECD, the G20, virtually every international investor in the UK economy and virtually every business organisation that represents businesses in this economy. The hon. Gentleman acknowledges at least that there have to be cuts. The offer that I make to him—he may take this up; I am not sure that his colleagues will—is to engage in a proper conversation in the Chamber over the next three or four months about the decisions that will obviously have an important impact on the way the Government function over many years to come.
Mr Osborne
I will give way on one more occasion and then make some progress.
Huw Irranca-Davies
I want to extend to the right hon. Gentleman the courtesy of asking the question that I asked previously, because he did not do me or my constituents the courtesy of answering it. If his judgment is wrong and the cuts are either too soon or too deep so that there is not sufficient economic growth to deal with the cuts that will be imposed, will that not mean that my constituents will suffer all the pain of the cuts and have none of the gain of the growth?
Mr Osborne
If the hon. Gentleman is not prepared to trust my judgment, let me read out what the Governor of the Bank of England has said:
“The most important thing now is for the new government to deal with the challenge of the fiscal deficit. It is the single most pressing problem facing the United Kingdom; it will take a full parliament to deal with, and it is very important that measures are taken straight away to demonstrate the seriousness and the credibility of the commitment to dealing with that deficit.”
That is the judgment of the Bank of England Governor—appointed, by the way, by the shadow Chancellor—and the judgment that we have taken in order to protect the prosperity and the livelihoods of the people whom the hon. Gentleman represents, and the people represented by everyone else in the House of Commons.
Mr Osborne
I will make a little progress, and will give way later on in my speech, if Members will allow.
Of course, the backdrop is that our economy has become deeply unbalanced. There is deep imbalance between different parts of the country: the wealth gap between regions widened over the past 13 years. There is imbalance between different sections of society: the gap between the rich and the poor widened in our country over the past 13 years. There is imbalance between different parts of our economy: the public sector boomed to take almost half our national income, while the private sector struggled with the deepest recession that we had seen since the war. This Queen’s Speech, with its landmark reforms of welfare and education, begins the task of righting those wrongs. Later in this debate, we will hear from my right hon. Friend the Secretary of State for Work and Pensions, who has done more than anyone to highlight the trap of low aspiration, poor education and welfare dependency that our fellow citizens do not deserve and our country cannot afford any more.
Mr David Winnick (Walsall North) (Lab)
However dismissive the Chancellor may be, those of us who have been here since 1979 and who saw what the last Tory Government did saw only too clearly that the burden of the cuts that were made then fell on those least able to bear it, and the rich and prosperous did very well indeed. That is why we are so sensitive about the people whom we represent, and why we are so suspicious of what the Chancellor is saying, no matter what sort of qualifications he makes. I am afraid that it is our people—the people who sent us here to sit on the Labour Benches—who will suffer the worst of the burdens.
Mr Osborne
The similarity is this: in 1979, a new Conservative Government also had to deal with a terrible economic inheritance from the Labour party. If the hon. Gentleman is so affronted by what Margaret Thatcher did during her premiership, perhaps he could explain why, every time there is a new Labour Prime Minister, virtually the first person they invite round for tea is Margaret Thatcher.
Mr Osborne
I will make a little progress.
The Queen’s Speech contains five Treasury-sponsored Bills, and I should say something about each of them. There is the national insurance contributions Bill to stop the jobs tax that Labour would have imposed. Like every post-war Labour Government, the previous Government left office with unemployment rising, and their answer was to increase the cost of employing low-paid people. I have not yet heard from the shadow Chancellor, or anyone else, whether that is still the official Opposition’s policy. Our reforms to national insurance will not just stop the most damaging part of the jobs tax but will, by raising employer thresholds, reduce the cost of employing people on lower incomes. The Budget will also contain further measures to stimulate private sector employment and to proclaim to the world that Britain is open for business.
There is the financial services regulation Bill to fix the previous Government’s system of banking regulation. To respond to the question asked by the shadow Chancellor, next week I will set out in more detail the content of that Bill and how we propose to take the matter forward. I find it somewhat baffling to be told by him that he is unsure who is in charge of banking regulation at the moment. That was the question posed by the Treasury Committee in the last Parliament—a question about the system of regulation that his predecessor as Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath, created in 1997. That system meant that no one was in charge of looking at the growing levels of debt and the systemic risks building up in our banking system.
I believe that it is still the Opposition’s policy to oppose our decision to introduce a bank levy; they claim that they want every country in the world to have agreed to such a levy before Britain goes ahead with it. Our decision is to proceed with it, because the banks should pay some contribution to clearing up the mess that they helped to create.
We are working urgently on a problem that the shadow Chancellor correctly raised, but to which, of course, he found little solution when he was Chancellor: the problem of getting credit to small and medium-sized businesses that still face a credit crunch out there in the country.
I welcome the shadow Chancellor’s support for the terrorist asset freezing Bill, which, of course, has bipartisan support. Then there is the Bill that should have been introduced by the previous Government years ago—the Equitable Life payments scheme Bill to help those who lost everything and were given nothing by the Labour Government.
Chris Bryant (Rhondda) (Lab)
I warmly welcome the fact that the Chancellor has introduced that Bill, which is an important piece of legislation, and I hope that compensation arrives for those who lost an awful lot of money. However, may I urge him to learn one thing from the miners compensation scheme, which ended up putting an awful lot of money into lawyers’ pockets—unscrupulous lawyers in many cases? Will he make sure that it is a simple, transparent scheme that does not require us to pour taxpayers’ money into lawyers’ pockets?
Mr Osborne
The hon. Gentleman makes a good point. What happened with the miners compensation scheme was a tragedy, and we will certainly seek to learn the lessons of what went wrong. He is more than welcome to correspond with us—I am going to volunteer, if he wants, a meeting with one of my colleagues to discuss the issue—because we are determined to introduce the legislation and help those people who lost everything. We hope that that will command support on both sides of the House.
Finally, we will introduce a Bill to give the independent Office for Budget Responsibility statutory authority and to bring transparency and honesty to our nation’s finances. I cannot work out whether the shadow Chancellor now supports that proposal, which he opposed in government, but it is a revolutionary step in budget making, removing forever the historic power that Chancellors have had to make the official forecasts. It is based, however, on a very simple idea—perhaps completely alien to the thinking of the previous Government—that in future, we fit the Budget to fit the figures, instead of fixing the figures to fit the Budget.
With the help of Sir Alan Budd, we have established the Office for Budget Responsibility on a non-statutory basis. Today I am publishing in a written ministerial statement the terms of reference that I have agreed with Sir Alan. With his consent, I can confirm in the House for the first time that the office will produce its independent assessment of the growth forecast and other forecasts next week, on Monday 14 June. The Budget will be presented just over a week later, well within 50 days of the election, as we promised.
Geraint Davies
On the figures, the Chancellor will remember that in February last year the unemployment rate was 2.5 million. Independent forecasters and economists were predicting that unemployment would now be between 3.5 million and 4 million. Does he accept that we do not have those levels of unemployment because of the fiscal stimulus from the previous Government? Furthermore, he will know that the cost of an extra 1 million unemployed is £6 billion, which would wipe out the savings that have just been announced. Will he therefore be extremely careful not to make cuts that will undermine the economic capacity for growth in future?
Mr Osborne
Unemployment is rising. We have the highest youth unemployment in Europe. We have the highest proportion of children growing up in workless households of any country on the European continent—that is not a record of which I would be particularly proud if I were a Labour MP. We are going to introduce a comprehensive work programme, and reform welfare to create genuine incentives to make work pay. One of the issues that came up time and again in the general election—for me at least, and perhaps for other Members—was the frustration felt by working people on low incomes who go out to work every single day and find that their next-door neighbour has been sitting on out-of-work benefits for years. That is going to be part of the reform that we introduce in our welfare Bill.
I was discussing the Budget, which needs to address the immediate debt situation that the country faces. However, it will also begin the long-term task of moving an economy based on debt—too much consumer debt, too much banking debt, too much Government debt—to an economy in which we save, invest and export in future. If anyone needs to be reminded why the immediate debt situation we have inherited is so serious, I suggest that they read the report on the UK produced by one of the world’s three credit-rating agencies today, which warns of
“a rise in public debt... faster than any other AAA rated sovereign”
country, and points to
“the largest cyclically-adjusted budget deficit in Europe”.
The rating agency says that the previous Government’s plans to reduce the deficit are “distinctly weak” and lack “credibility”. It says that we are the only European economy set to run a budget deficit above 3% in five years’ time. That is all at a time when, as it points out, the fiscal crisis in Greece and other eurozone countries has caused a major shift in investors’ attitude to sovereign risk.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I thank the right hon. Gentleman for giving way. He spoke earlier about judgment. Is he not concerned about the outbreak of competitive austerity across Europe? Does he not think that that may well lead to European economies all bumping along the bottom because we cannot get international trade up and running again to sort out the difficulties of our economy?
Mr Osborne
But the reason why European economies, particularly those in southern Europe and in the eurozone, are having to take the measures that they are taking is that there are concerns about sovereign credit worthiness. Of course they must deal with their situation, but, in the month that I have done the job, I am very aware when I sit down at ECOFIN or at the G20 that I represent the country with the largest budget deficit at either of those gatherings. That is the situation that we inherited—[Interruption.] For two years we had to listen to all the lectures about how the European Union, the G20 and the OECD disagreed with what we are saying. Now they agree with what we are saying. The G20 communiqué signed in South Korea stated:
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation”.
That is the situation bequeathed by the previous Government to Britain.
Mr Ivan Lewis
I thank the Chancellor for giving way. I have some simple questions. Were we right to save Northern Rock? Were we right to recapitalise the banks? Were we right to go for fiscal stimulus? Can the Chancellor be frank with the House about the decisions that my right hon. Friend the shadow Chancellor made?
Mr Osborne
Talk about refighting the last war. We spent the entire general election talking about those decisions. The answer is that the British people agreed with us and not with the shadow Chancellor.
Mr Osborne
Let me make some progress.
It is striking that the Opposition do not have a single positive idea to propose about how we sort out our nation’s economic problems. They are still talking about decisions taken a year previously or in 2008. I am happy to debate them; I debated them on television with the shadow Chancellor during the general election; I debated them in the House on many occasions, but what I am now interested in is sorting out the country’s economic problems and getting Britain working again.
Mr Osborne
I have given way a great deal, and there are Members on both sides of the House who want to make their maiden speeches.
Let me say this to Labour Members: their response in this debate and in Treasury questions is pretty striking. The credibility of our country is put at risk by their borrowing decisions, and they do nothing. Higher debts threaten higher interest rates, and they do nothing. Every single measure that we have taken they oppose. They sign up to every pressure group complaint. They agree with every trade union protest in order to gobble up votes in their leadership contest. They now find themselves in the ridiculous position whereby the reductions in spending for this year are applauded by the G20 but opposed by the shadow Chancellor who used to attend it, and our clear commitment to accelerate the reduction in the deficit is supported by the US Treasury Secretary but opposed by the shadow Chief Secretary. Let them lurch off leftwards into the comfort zone of opposition, while the rest of us work together in the national interest to fix the problems that they left behind. Let me explain how we propose to do that.
Alongside other measures to support the recovery, the Budget on 22 June will set out the overall mandate for bringing the deficit under control, against which the Office for Budget Responsibility will judge the Government’s fiscal policy in future. It will set the overall envelope for spending, but it will not allocate spending between Departments. That is what the spending review will do this autumn.
Today I am placing in the Library of both Houses the document that explains how the review will work. The shadow Chancellor complained that he received the document only as he was coming into the Chamber. That was about an hour before I used to receive any document from him in the debates in this place.
Given the scale of the spending reductions required, the review needs to be quite different from any that this country has seen in recent years. For the past 13 years, spending reviews have not exactly been collegiate affairs—more of a one-way process. The Treasury told Departments what they were getting and precisely what they would do with the money—no room for innovation, no acknowledgement that some of the best ideas for doing things differently might come from the front line and not from the centre. The result of this top-down, centre-knows-best approach was falling public sector productivity and that large budget deficit—less for more. We cannot afford to continue in that direction.
As has been said in the Chamber today, we need to look at Canada and its experiences in the 1990s, when it too faced a massive budget deficit. It brought together the best people from inside and outside government to carry out a fundamental reassessment of the role of the state. They asked probing questions about every part of Government spending. They engaged the public in the choices that had to be made, and they took the whole country with them. That is what we will seek to do. We are committed to carrying out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country.
The spending review will be guided by the principles of freedom, fairness and responsibility. It will deliver on the Government’s commitment that health spending will increase in real terms in each year of this Parliament, and we will honour the promise that we as a British people made to the developing world on overseas aid. It will limit as far as possible the impact of reductions in spending on the most vulnerable in society and on those regions heavily dependent on the public sector. It will protect as far as is possible the spending that generates high economic returns so that we build the economy of the future while cleaning up the mess of the past.
Mr Nigel Dodds (Belfast North) (DUP)
The Chancellor mentions those areas heavily dependent on the public sector and the impact on different regions of the United Kingdom. I welcome that commitment, but in order for it to be real, as opposed to simply rhetoric—he talks about the Finance Ministers quadrilateral meetings discussing the spending review—will there be a robust resolution mechanism, so that it is not just the Treasury that decides what happens with regard to the devolved Administrations, which, after all, have their own independent administrations, budgets and economic settlements?
Mr Osborne
The devolved Administrations have to be part of the wider spending review. With the best will in the world, we cannot let the three devolved Administrations simply determine what they will spend, particularly when most of them do not have significant tax-raising powers, but I give the hon. Gentleman the commitment that we will engage in an open and frank way and that we will listen to the concerns from Northern Ireland. I am well aware that one of the big challenges in Northern Ireland is how we can stimulate the private sector in Ulster, and we want to work with him on that. As I am sure he knows, the Secretary of State for Northern Ireland has some ideas in that area. We will engage not just with the Administration in Northern Ireland but with the Scottish Government and the Welsh Assembly and its Administration. For us, this is genuinely about trying to bind as many people as possible into a collective discussion which I hope other Opposition parties will be part of, even if the main Opposition party does not want to be.
Let me explain to the House how the review will work. First, we will build on the in-year savings that we have already made in order to drive for efficiency and value for money. We are creating a new efficiency and reform group at the heart of Government, which brings together a variety of bodies that are separate across Departments in order to try to bring to one place expertise on renegotiating contracts, maximising collective buying power and the like. We will ask for administrative spending in central Whitehall and quangos to be reduced by at least a third. Each Secretary of State will appoint a Minister with specific responsibilities in their Department over the next three months for driving that value-for-money agenda across their Department, and we will place a new obligation on public servants to manage taxpayers’ money more wisely by strengthening the role of the departmental finance director.
Mr Tom Watson (West Bromwich East) (Lab)
I strongly support the Chancellor in his drive to have more transparent budgeting, in particular the obligation on Departments to announce every item of expenditure over £25,000. Will he be legislating to make that a statutory obligation? Will he explain the slight incongruity between the obligation on local government to publish items of expenditure over £500 and civil servants getting away with a little bit more at £25,000? Does he think that merits him reducing that bar?
Mr Osborne
We chose £25,000 because, quite frankly, the US model suggested that that was an appropriate sum. I am very willing to consider moving to a lower level of disclosure in central Government, once we get the system up and running and working, but I did not want to make the sum so small that it stopped the thing working in the first place. Local councils have much smaller budgets, of course, relative to central Government, and that is why we chose a lower threshold. However, the £25,000 threshold is perhaps just the first step. The big IT challenge is to make the system work, but in the United States they have done so, and they call it “Googling your tax dollars”. Barack Obama, when he was a senator, helped to sponsor the Bill that introduced it, and we are absolutely committed to introducing such a measure here in the United Kingdom.
Secondly, the spending review will challenge Departments, local government and others to consider fundamental changes to the way they provide public services. As part of that process, every part of government and every spending programme will have to answer a series of probing questions. Is the activity essential to meet Government priorities? Do the Government need to fund that activity? Does the activity provide substantial economic value? Can the activity be targeted on those most in need? How can the activity be provided at a lower cost? How can the activity be provided more effectively? Can the activity be provided by a non-state provider or by citizens, wholly or in partnership? Can non-state providers be paid to carry out the activity according to the results that they achieve? And can local bodies, as opposed to central Government, provide the activity? The answers to those questions will inform a fundamental reassessment of the way in which government works.
Dr John Pugh (Southport) (LD)
Where will the Public Accounts Committee and, indeed, other Select Committees play a part in the process? How will they play their part?
Mr Osborne
The Public Accounts Committee will, I hope, be very involved in the process, and I want to involve the expertise not only of its current membership, but of my hon. Friend the Member for Gainsborough (Mr Leigh), who chaired the Committee with such distinction during the previous Parliament. I served on the Public Accounts Committee when I first entered the House, and it is perhaps our most effective parliamentary tool for dealing with some of the big issues of public expenditure and value for money. One has only to read its reports on, for example, the big Ministry of Defence procurement contracts over recent years to realise that it has identified a very serious problem and, with the National Audit Office, brings a considerable expertise to solving those problems.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the right hon. Gentleman give way?
Chris Leslie
At Treasury questions some time ago, I was concerned about items of expenditure that might have met the tests that the Chancellor has set out in the spending review. On some of those tests, will the Chancellor now go where the Chief Secretary to the Treasury could not and say whether he has any plans to means-test child benefit? Many people are quite worried about that.
Mr Osborne
I welcome the hon. Gentleman back to the House, but I shall not be drawn down the path whereby new, eager and young—or no longer so young—Members jump up with every cherished item of Government expenditure and pose such questions. The hon. Gentleman will have to wait for the spending review and Budget for a discussion of the whole Government programme, but he should not assume anything from that answer.
The next thing that we will do is bring together, from within the Government and outside, the best people in their fields. We want the best civil servants helping us in that collective effort, not defending their Whitehall Departments. We want the inspirational head teachers, the chief inspectors in the police service and the nurses with new ideas to have their opportunity to put their ideas to us. The remit will be to innovate, to challenge entrenched ways of doing things and to identify the best ideas from throughout the world; and, in order to ensure that the resulting reform programme is achieved, we will establish robust mechanisms to ensure accountability to the public.
Thirdly, the spending review will cover the large, cross-cutting areas of Government spending. We will set out our plans to reform the welfare system and restrain the cost of public sector pay and pensions, and for capital spending we will undertake a fundamental review of spending plans to identify the areas of spending that will achieve the greatest economic returns. Opposition Members should know that we have inherited a capital budget that is set to halve.
Mr Douglas Carswell (Clacton) (Con)
My right hon. Friend has been quoted talking about having a Star Chamber to oversee public spending. For years, have we not had an elite clique of Treasury officials doing precisely that? Somehow, no Executive quite manage to rein in the executive as planned. Why not in addition try a radical solution and give the newly liberated Select Committees powers to curb departmental spending? As well as fixing our finances, that might give Parliament some purpose.
Mr Osborne
I am probably going to regret this, but I am quite attracted to the idea that my hon. Friend has proposed, not just in the Chamber today but to me privately; I think he has also written about it. The key thing that he proposes is that Select Committees should be able to recommend reductions, rather than increases, in Government Department budgets. I would certainly welcome that if we were ever to proceed in that direction.
I honestly mean it when I say to my hon. Friend that I am attracted to his idea. I will come back to him and see whether we can take it forward. Obviously, it would be the collective decision of the Government, rather than mine alone. My hon. Friend is right to say that we are trying to get away from it simply being the Treasury that conducts the spending review, imposing its decisions on everyone else.
I believe that when Tony Blair was Prime Minister, he and the right hon. Member for Kirkcaldy and Cowdenbeath would simply agree a total. Every Secretary of State would then receive the number in an envelope, before it was announced to the press about 20 minutes later. We are going to have a more collegiate approach and we are genuinely seeking to engage as many people as possible—the brightest civil servants across all the Government Departments and the best people from the devolved Administrations, pressure groups, independent think-tanks and front-line public services. There will be a Cabinet committee to chair and oversee the process and its membership will be restricted to those Cabinet Ministers with very small budgets of their own. Other Cabinet Ministers will be eligible to be members of the committee once they have settled their departmental allocations. That will create an incentive structure within the Cabinet.
Finally, over the summer we are going to conduct a wide public engagement exercise so that the whole country has a chance to get involved. We have already begun to implement the most radical transparency agenda that the country has ever seen. The hon. Member for West Bromwich East (Mr Watson) and I were talking earlier about the £25,000 disclosure limit for central Government expenditure. The previous Chancellor refused my freedom of information request to publish the Treasury’s combined online information system, or COINS, database of public spending. But the current Chancellor of the Exchequer has accepted that request and the raw data in the COINS database are now available online.
Mr Osborne
I will give way on this point, if the hon. Gentleman likes, but just let me say this. We have published the database as quickly as we have been able to. By August, we will be able to publish a more user-friendly version of the data; the current version is quite difficult to operate. We need a couple of months to get the computer software to enable people to search the database.
Mr Bailey
In his list of those who would be consulted on the budget cuts, the Chancellor omitted to mention manufacturing industry. Will he undertake to talk to representatives of manufacturing industry about his proposals on investment allowances, as portrayed in the run-up to the general election?
Mr Osborne
My team and I are in regular discussions with manufacturing industry, representatives of which were vocal supporters of our proposals during the general election to avoid the jobs tax.
Let me conclude by saying that all parts of government and society—and all parts of this Parliament, if they want to take the opportunity—will have a chance to make their voices heard. This is the great national challenge of our generation. After years of waste, debt and irresponsibility, we have to get Britain to live within its means. It is time to rethink how the Government spend our money. We did not choose the terrible economic situation that we inherited; the Labour party chose that for us. But we can work to put it right—deal with our debts, set our country on a brighter economic course and show that we are all in this together. I commend the Gracious Speech to the House.
Mr Robin Walker (Worcester) (Con)
I am very grateful for this opportunity to address the House for the first time. Today’s debate and the excellent speeches of so many hon. Members have done nothing to reduce the awe with which I approach this task, and I commend the hon. Member for Bethnal Green and Bow (Rushanara Ali) for her passionate speech and associate myself with her views on the blockade of Gaza and the importance of creating employment. I share in the salute of my hon. Friend the Member for Bromsgrove (Sajid Javid) to the brave soldiers of the Mercian Regiment, who have laid down their lives for our country.
My first thanks are due to the electors of Worcester, who have sent me to this Chamber, and I am conscious that I shall be forever in their debt. I intend to repay that debt by working tirelessly on their behalf and being Worcester’s man in Westminster. I must thank also my predecessor, the former Member for Worcester, Michael Foster, who for 13 years was a fierce advocate for his party, a tireless campaigner for animal rights and a distinguished supporter of his Government. As a Whip, a Parliamentary Private Secretary and a Minister, he did much to further the interests of peace in Northern Ireland and international development, and for that he deserves the approbation of this House.
It would be remiss of me not to mention some other former Members for Worcester. My hon. Friend the Member for Mid Worcestershire (Peter Luff), who is now an Under-Secretary at the Ministry of Defence, served the city well until boundary changes took him from us. He is a friend and a mentor, the first MP for whom I ever had the privilege to vote, and now one who has the dubious privilege, shared by my right hon. Friend the Member for Charnwood (Mr Dorrell), of having voted for me. I know that every Member will join me in wishing my hon. Friend the Member for Mid Worcestershire success in providing the best possible equipment to our gallant armed forces over the years to come.
Before my hon. Friend’s time there was, of course, another Member for Worcester with whom I am very familiar, but as my hon. Friend spoke so eloquently on his behalf in his maiden speech, I shall say only that, as many thousands of constituents have reminded me on their doorsteps, he is a hard act to follow. I owe that Member, my father, my lifelong knowledge of, and deep love for, my constituency and its history, not to mention my support for the once and future premiership rugby team, the Worcester Warriors, and my support—shared with the Governor of the Bank of England—for the cricket team, which has the most beautiful ground in the country.
The task of representing Worcester, made so enjoyable by those factors, is made all the more daunting by the fact that the city has been represented in Parliament since the 13th century. Empires have risen and fallen and royal houses have come and gone in the time that MPs have spoken for Worcester, but I do not intend to go on for that long. The city, of course, played its own major part in the civil war. The first shots of that war were fired beyond the boundaries of my constituency, near Powick bridge, and its last slaughter took place at the Sidbury gate, now in the heart of modern Worcester, as Cromwell finally crushed the King’s army and took the faithful city. That war started after an arrogant Government had overspent and oppressed the people of the country with unfair taxes.
At the end of the battle of Worcester, the parson of the parliamentary army addressed the troops and said to them:
“Say you have been at Worcester, where England’s sorrows began, and where happily they are ended.”
I hope that, given the alleged role of Worcester woman in bringing Labour to power over the past 13 years, the same might be said again today.
The civil war was one of the historic events that gave us the evolved constitution that we have today. Respect for that constitution is one of the things that inspires me in politics, and, despite much tinkering over the past 13 years, there is still much to be defended: the unique position of the Crown; the privileges and stature of this mother of Parliaments in holding the Government to account; the powerful ties that bind Members to their constituencies; and a system of election that is simple, effective and allows for the removal of failed Governments. All those are worth fighting for with the same passion with which our ancestors fought on the battlefields of Worcester.
As I am passionate on that subject, so also I am passionate about opportunity. My party has always been the party of opportunity. In the Gracious Speech and in this debate, we have set out plans to support opportunity for British businesses, for young people, and for those on welfare to escape the traps of unemployment and dependency. Opportunity in business, and that unleashed by the national insurance reforms that we propose, will benefit Worcester Bosch and Yamazaki Mazak, innovative manufacturing companies that, between them, employ thousands of people in my constituency.
The coalition Government have set out exciting plans to support green technology, and I support those initiatives. I believe that they will benefit companies in Worcester, but I am concerned that there has so far been no mention in Government statements of the renewable heat incentive. Given that homes are responsible for 21% of the carbon emissions generated in this country, and that 73% of energy in the home is used for heating or hot water, supporting renewables for heating should be given as high a priority as support for the renewable generation of electricity.
Worcester has a range and diversity of businesses, great and small, that reflects the range of topics covered in the Gracious Speech. The breadth of our economy ranges from engineers to health care companies, industry associations, recyclers and housing associations. I have visited firms, such as Craegmoor Healthcare, Skills for Security, the Remarkable recycling company and Sanctuary Housing, which are all headquartered in Worcester and, as an MP, I want to ensure that Worcester remains a place to which businesses want to come, maximising the opportunities for my constituents.
To maximise opportunity, we need the best education to be available to all, and that is why I welcome the exciting reforms proposed by the Secretary of State for Education. We have already seen how academies can turn around the fortunes of failing schools and, in Worcester, the Tudor Grange academy is a shining example of that trend, so I welcome the decision to open up the opportunity of freer education to more schools in the area.
Supporting opportunity means careful nurturing of further and higher education. I shall support both, and I am very proud that Worcester boasts the country’s fastest-growing university. The university of Worcester, which I congratulate on its recent Ofsted report, was rated “outstanding” for its training of teachers at primary and secondary level, and the principal of Worcester college of technology was recently elected president of the Association of Colleges.
For opportunity to thrive everywhere we need fair funding in education. Today the average pupil in Worcestershire receives £370 less than the national average and a staggering £762 less than children in the neighbouring authorities of Birmingham, despite the fact that some parts of my constituency are among the 10% most deprived areas in the country. I have high hopes for the coalition Government’s pupil premium policy in addressing that issue.
The last Walker to speak for Worcester began his maiden speech by saying,
“I hope that if, in the course of my remarks…I make what are considered to be constructive criticisms of the Government’s economic policy, this will not be considered indicative of a person representing a constituency noted throughout the world for its production of sauce.”—[Official Report, 20 April 1961; Vol. 638, c. 1433.]
I shall be equally ready to make constructive criticisms and to place my constituency at the forefront of my parliamentary career. In the interests of Worcester, I commend the Gracious Speech.
The Leader of the House of Commons (Sir George Young)
On a point of order, Mr Deputy Speaker. At half-past 6, you will leave the Chair for the last time. May I endorse what Mr Speaker said earlier and, on behalf of the whole House, thank you for your impartial, firm but courteous service over 13 years?
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
It has been a really interesting debate, and I thank the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) for her kind comments welcoming me back to the Dispatch Box. Her husband is probably away doing whatever one does when one is standing to be Leader of the Opposition. Let me say this to her so that she can quietly say it to him: it is not all that it is cracked up to be. She might whisper that in his ear and hope that he does not get the nominations.
We have had an excellent debate; the right hon. Lady is correct about that. As for all those who made maiden speeches, the degree to which they consider it a real honour to have been elected is a great reminder to all of us who have, over time, become a bit more cynical about the speeches that we make in this place. Almost every one of those speeches reminded me—and, I know, pretty much everyone else in the House—of that fact.
My hon. Friend the Member for Bromsgrove (Sajid Javid) confessed to being a banker, as the right hon. Member for Normanton, Pontefract and Castleford said. That is a pretty brave thing to do in this House at the moment. He paid a moving tribute to the two soldiers from his constituency who died. My hon. Friend the Member for Loughborough (Nicky Morgan) said that she was happy to be here, and I am happy about that, too, but she replaced a good friend of mine from the other side of the House, Andy Reed, with whom I used to play football. I am rather sorry to see him go—he was a very good MP—but not that sorry, and I am pleased to see my hon. Friend here.
The right hon. Member for Normanton, Pontefract and Castleford is right to say that the hon. Member for Stretford and Urmston (Kate Green) comes to this House with a strong record on the subjects that we are considering. I look forward to hearing her speak informatively, and to her bringing her great knowledge to debates. Most of us will consider her a real asset to this House.
The hon. Member for Blaenau Gwent (Nick Smith) said that he stood on the shoulders of giants, and I must say that they do not come any bigger than the two to whom he referred—Nye Bevan and Michael Foot, probably two of the greatest orators to have sat in this place—so he has huge shoes to fill. He spoke about benefit dependency, a huge issue, and one to which I shall refer in a second; it is at a ridiculous level.
My hon. Friend the Member for High Peak (Andrew Bingham) challenged anyone in this House to match his constituency for natural beauty. I can with Chingford. We do not have a lot of countryside, but we have a lot of people who work very hard—and who pretty well tell their MP that MPs do not.
The hon. Member for Strangford (Jim Shannon) talked about high unemployment in Northern Ireland; it is, of course, staggeringly high there—higher than in most other places. We know that there is a historical issue there, but there is also much more that we have to do about it. I hope that he will play a full part in that when the time comes.
My hon. Friend the Member for Aberconwy (Guto Bebb), who spoke very well, talked about his constituency. He said that my right hon. Friend the Leader of the House told him, when he arrived here, not to get too used to this place because his constituency would soon be abolished. That threat has been given to all of us throughout the years; it is either our constituency or we who should be abolished. One way or another, one can fit oneself around that. In my case, it was more me than the constituency that was to be abolished.
The hon. Member for Bethnal Green and Bow (Rushanara Ali) spoke about her direct predecessor, George Galloway, who stirs emotions on both sides of the House—not necessarily very constructive ones among Labour Members. Her predecessor but one, Oona King, was highly respected on both sides of the House. If she was in another party, I would wish her the best of luck with any chance that she has to be Mayor, but in the meantime, she will be a great adornment to the campaign.
May I tell my hon. Friend the Member for Worcester (Mr Walker), who mentioned his father, that those are a big pair of shoes to fill? I knew the father of my hon. Friend the Member for Rugby (Mark Pawsey) incredibly well. Jim Pawsey was well regarded by Conservative Members and well liked, so my hon. Friend will have a big act to follow, as his father was always direct in telling people what he thought, regardless of whether it cost him a job: it did. The hon. Member for Labour—rather, the hon. Member for Leeds West (Rachel Reeves); I apologise, I did not quite hear some of the speeches, and I did not write all these notes. However, I gather that she made an extremely good speech, and spoke about her predecessor, John Battle, who was well liked in the House. She also quoted the Japanese advice to lead, and not to reduce borrowing quickly. I am an eighth Japanese, and the Japanese are not always right about everything.
My hon. Friend the Member for South Staffordshire (Gavin Williamson) praised his predecessor, Patrick Cormack—[Interruption.] Yes. Many of us remember him fondly. The one thing that we do remember about him is his incredible ability to speak about this place in 17th-century terminology as “Parliament assembled”. He will be much missed, and I hope that my hon. Friend fills his shoes very well indeed. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who is a member of Plaid Cymru, spoke about fuel poverty—something to which we shall definitely return—and benefit complexity. I welcome him to the House if he shows interest in those subjects.
The hon. Member for St Austell and Newquay (Stephen Gilbert) spoke about being got rid of as a result of a boundary review affecting his constituency. Again, I suggest that he fight that if he can: he may be here longer than he thinks. My hon. Friend the Member for Vale of Glamorgan (Alun Cairns) spoke very well, and referred to “Gavin and Stacey”. I am not quite sure what the connection is, except that Gavin came from Essex—near Chingford—and Stacey came from Wales, which shows that on this side of the House, we can unite the party yet again. It is a fairly tenuous link, I grant.
The hon. Member for Birmingham, Ladywood (Shabana Mahmood) has very big shoes to fill. Clare Short ended her parliamentary career in some measure of dispute with her party, but I can hardly think of anyone who has left the House, whether in government or opposition who was more well respected—[Interruption.] Well, she spoke passionately, but people did not always agree with her. However, if someone’s fault is that they are passionate in the House, it is a fault with which everyone will agree.
My hon. Friend the Member for East Hampshire (Damian Hinds) spoke well about his support for preventing poverty. The hon. Member for South Down (Ms Ritchie) was keen on the poverty agenda, and spoke about living in the same house as St Patrick. Any attempt to be deified in the House will end in tears. My hon. Friend the Member for South West Norfolk (Elizabeth Truss) spoke about the importance of skills, in another very good speech. The hon. Member for Stockton North (Alex Cunningham) spoke about credit unions and loan sharks. I am with him on that: we need to do a lot more to try to break the stranglehold of doorstep lenders and, more particularly, of the very bad elements among loan sharks. I am very strong on seeing what we can do about credit unions.
May I tell my hon. Friend the Member for Grantham and Stamford (Nick Boles) that his seat is a Conservative gain, although it was Conservative before? His predecessor remains a friend of mine. It was always difficult to know quite where Quentin was going to be standing at any one time.
Mr Duncan Smith
That is exactly right.
The hon. Member for Belfast East (Naomi Long) said that she was dedicated to bridging the political divide and the regions, as a member of the Alliance party. She should come across to this side of the House: we are the living embodiment of an alliance, so perhaps she could join us. My hon. Friend the Member for Wycombe (Steve Baker) made a very good speech, and I remember his predecessor, Paul Goodman, very well. The hon. Member for Edinburgh South (Ian Murray) made an excellent speech and spoke about astronomical manufacturing. I am not quite sure what that means, but it sounded good at the time.
The hon. Member for Edinburgh West (Mike Crockart) spoke about the pivotal role of community groups. I agree with him. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) paid tribute to the grass roots and sense of respect of the people of Newcastle. She made an extremely witty speech. If she carries on like that in the House, she will rise fast and dominate her own side. I commend her.
My hon. Friend the Member for Orpington (Joseph Johnson), who made a very good speech, said that he did not have the humour gene of his brother, but he proved that not to be true. He has the hair, too, of which I am rather jealous. He will go far in the House, provided he follows his brother’s trait of never sticking to any particular line for any length of time but ending up being elected to highest office while he is at it, which is a pretty good record of success.
The hon. Member for Lewisham East (Heidi Alexander) made a very good speech. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) spoke about business being strangled by red tape. The hon. Member for Edinburgh East (Sheila Gilmore) made an excellent speech. My hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) made a very good speech in which he spoke in Shakespearean terms about the gathering clouds and the dark lowering economy. I was getting so worried at one stage that I thought I would not get to the Dispatch Box to speak at all. Never mind, here we are.
I shall touch quickly on speeches not made by new Members. The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), whom I know and like enormously, blamed bankers, the world economy, the leadership candidates in his own party, and everyone except the previous Government, for the shambles that we are now in. He should think again. It was the Government of whom he was a member who reduced the country to the state that it is in.
Mr Duncan Smith
We do not have a great deal of time. I will give way, but I shall finish shortly.
Mr Blunkett
I am grateful and I shall be brief. Perhaps the right hon. Gentleman, whom I wish well, would describe to all of us why the rest of Europe has been devastated by the Labour Government.
Mr Duncan Smith
I can answer many questions, but I cannot say what the last Labour Government did as they toured Europe destroying all those economies, so I am afraid I cannot help the right hon. Gentleman. All I know is that we have spent huge sums, much of it not carefully adjusted to see whether it was working, including the future jobs fund, about which I was asked earlier. The issue is not that it was not creating jobs, but that the jobs that were being created were more than likely to be temporary, they were nowhere near the number originally projected, and the cost of the programme was running out of control.
Everyone wants to create jobs and stop the wage scar for the young unemployed, but I must tell the right hon. Member for Normanton, Pontefract and Castleford that we face a nightmare in which we have to look at the spending to make sure that whatever we spend delivers real life change. We will be doing that with welfare reform to try to make it much easier for people to get back to work, and to make sure that the money they earn is real money and means that going to work pays. We will reform pensions. The right hon. Lady and her party managed to lower the level of life chances for far too many people in this country, and it is the coalition Government who now set out to help the young, the unemployed and the impoverished in Britain once and for all.
Question put, That the amendment be made.