Budget Resolutions and Economic Situation

Andrea Leadsom Excerpts

Wednesday 19th March 2014 Commons Chamber

[Derek Twigg]

My hon. Friend makes a very important point. Whose side are this Government on? They are on the side of the rich, not the people who actually run our health service—the nurses, care workers and so on—

[Andrea Leadsom (South Northamptonshire) (Con)]

Will the hon. Gentleman give way?

[Derek Twigg]

I will not, if the hon. Lady does not mind, because I have given way once and I know that other hon. Members want to speak.

The Government are not on the side of the nurses, as nurses know and understand; they are returning to true form in cutting the NHS, as they did the last time they were in power, while doing nothing about the deficits that hospitals in this country have to carry as a result of their policies and their poor funding of our hospital services.

I want to turn to the important area of defence, which rarely gets mentioned during Budget debates. Under all Governments, the Treasury has always had a vital role in the amount of money provided for defence, but the whole of our defence policy now seems to be run by the Treasury, which is not taking account of our present and future security needs. The massive cuts in the Army, the Navy and the Air Force will create real problems in future years, and we will come to regret those cuts. This Government’s defence policy is all over the place, and we heard nothing today about what they are doing to fund defence in future. That is storing up serious problems for this country’s influence in the world and its ability to respond to threats, such as what is happening in Ukraine and Russia.

At my surgery, I see many people on benefits who deserve and need them but who are now waiting even for their personal independence payment to be assessed—it is taking months and months. The system is in absolute chaos, with people being kicked off benefits for trivial reasons. We are also seeing the impact of the bedroom tax. What is happening to some of the most vulnerable low-income people in this country is an absolute scandal. It is okay for the Chancellor to say that there should be a benefits cap, but we do not know what it actually means for those deserving people who need benefits to be able to survive and continue with their lives. We do not know the details of what it will mean, and the Chancellor said nothing about it today.

The Government are clearly out of touch with ordinary people. They are run by a bunch of public schoolboys, and their first priority is to look after the rich and to ignore the rest.

--- Later in debate ---

[Andrea Leadsom (South Northamptonshire) (Con)]

This Budget has been billed as a resilient Budget for a resilient economy. I say that it is a robustly, and indeed resolutely, resilient Budget for a really strong future economy. I completely agree with my hon. Friend the Member for Warrington South (David Mowat) that it passes all the tests of looking to the long term, rather than at short-term give-aways, which is so important in any Budget.

The first thing I would like to say is a huge thank you to the Chancellor on behalf of Northamptonshire for the contribution to a pothole fund, which Northamptonshire will be universally delighted about—[Interruption.]

[Andrew Selous (South West Bedfordshire) (Con)]

It is not just for you.

[Andrea Leadsom]

That is a great shame. The Chancellor mentioned my hon. Friend the Member for Northampton North (Michael Ellis), so I was rather hoping that we would get to keep it all, but perhaps not.

I would like to mention the efforts that the Chancellor has made for business, which is the source of our country’s long-term recovery. Doubling the annual investment allowance to £500,000 per annum is superb for businesses and will allow manufacturing companies in my constituency, for example in motorsport valley—the area around Silverstone—to invest in plant and equipment. Doubling the UK’s direct export lending programme will enable us to create the export-led recovery for the long term that we so much want to see. Capping the carbon price support rate will save costs for manufacturers in the medium and long term. That is great news for the east midlands, the west midland, the north of England and the entire UK. I hope that Opposition Members will be honest enough to welcome those measures.

I commend the Chancellor on his work for savers and pensioners, which is truly groundbreaking. I also want to pay tribute to Dr Ros Altmann, who has long campaigned for changes to annuity rates. She has been pointing out the weakness in the annuity construction of pensions for many years. I understand that she was in fact an adviser to Opposition Members when they were in government. She has been trying to persuade Governments of all colours to lift the unfair obligation to buy an annuity on reaching retirement age. I am delighted about the news, which will really change the fate of future pensioners.

The annual ISA cap has been lifted to £15,000, but much more important is the allowing of investors to choose whether they want to invest in cash or stocks to meet their savings needs. These things are incredibly important. When it was introduced, quantitative easing was essential to try to prevent further harm to our economy. However, there can be no doubt that the historically low interest rates that have resulted from the QE programme have very badly harmed savers and pensioners—those on fixed incomes. The structural change that the Chancellor has made is really important and will be welcomed not just in my constituency but across the UK.

I have paid tribute to Dr Ros Altmann, who I feel sure is a woman of absolutely high enough calibre to be considered for the next post available on the Monetary Policy Committee, the Financial Conduct Authority or the Financial Policy Committee. I defy any Member to disabuse me of that notion. I also welcome the appointment, announced yesterday, of Dr Shafik to the Monetary Policy Committee.

[Diana Johnson]

On merit.

[Andrea Leadsom]

Absolutely on merit, as is the case for all high-calibre women. The Governor of the Bank of England is showing real foresight in recognising that he needs committees of a diverse range of talents—not just the white middle-class theoretical economists whom he has tended to inherit from the previous Governor. The appointment is incredibly important. Dr Shafik will be leading the Bank’s review of its market intelligence following the fixing of foreign exchange rates. The Treasury Committee will follow that with great interest. Sadly, there may be many more fines as a result of the appalling behaviour that we continue to see among the banks. Those fines will be put to good use.

I want to use the last few moments of my contribution to talk about a real game-changer for the banks. I commend to all Members something in page 84 of the Red Book. It is perhaps the most ground-breaking, profound proposal of the Government’s in this Budget:

“The government has today announced that it will switch on the Market Investigation Reference powers of the Payment Systems Regulator a year ahead of schedule.”

That means that there will be a regulator of payment systems. Until now, there has been a small group of powerful banks that are, yes, too big to fail, as we have discovered only recently to our enormous cost. They have also been determined to put up barriers to prevent the entry of second-tier, smaller banks and shut out new competitors. A regulator of payment systems will surely reduce those barriers and enable the new banking competition that Members across the House want.

Specifically, the really important measure in the Budget is the requirement on the payments regulator to review the effectiveness of the current account switching service and look at instant account portability before the next Budget. If someone wants to switch bank account now, they have to move their account number, cheque book, bank cards and so on. People get to keep their mobile phone numbers when changing mobile phone provider; it would be so much easier for people if they got to keep their bank account numbers when switching bank accounts. It would also be so much easier for new challenger banks to persuade us to switch—“Just give us a try. If you don’t like us, you can go back to your old bank tomorrow.”

People could literally switch bank once a week or fortnight. That would significantly encourage new competition, but most importantly it would persuade the big banks that they needed to enter into customer retention strategies, which they have not had to do for years. Such a change would significantly improve the fate of small and medium-sized enterprises, which desperately need to be able to access new sources of financing. It would also mean that the Bank of England could easily step in to move accounts from a failed bank to a survivor bank, thereby ensuring that the awful situation of people queuing down the street to take their money out, as happened with Northern Rock, would never happen again.

In summary, this is a resolutely resilient Budget which I believe contains some seriously game-changing proposals that will have a significantly positive impact on the future of our economy for many years to come.